Strong demand for products like Altima mean Nissan will deliver a double-digit July sales gain.
It may be an unexpectedly cool summer in much of the country but you wouldn’t know by looking at July’s sales numbers – which have many industry observers expecting the rest of the year to remain hot.
Mark Fields, Ford Motor Co. chief executive officer, noted the general economy appears steady, which should lead to strong sales during the second half of the years. Chuck Stevens, General Motors chief financial officer, also said the second half of the year looks very promising.
Preliminary data suggest that July new-car sales will be up about 12% over year-earlier numbers, putting the industry on track for its best July since 2006, well before the U.S. economy began to collapse. Overall sales should reach about 1.46 million for the month, according to new forecasts from TrueCar and Kelly Blue Book, and that translates into a seasonally adjusted annual rate, or SAAR, of 16.6 million to 16.7 million, roughly a million ahead of total sales in 2013.
“Sales in the first half of the year totaled 8.15 million, an increase of 4.2% from last year. In the second quarter, sales hit 4.41 million, which is the second-best quarter since 2006,” said Alec Gutierrez, KBB senior analyst, noting that new car sales increases are expected to continue into the second half of the year, for a full year total of 16.3 million, which would be a 4.9% improvement from 2013.
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While most vehicle segments will show sales gains in July, Kelley Blue Book expects the compact and midsize segments to continue to lose market share. In fact, non-luxury car sales, which consist of nearly 40% of the market, are down 1.5 percent, due to the reviving demand for small and midsize SUV and crossovers.
“In addition to increasing small SUV sales, luxury utility sales also are on the rise climbing 14% this year, helping improve overall luxury sales by 8.6 percent,” said Gutierrez. “While Kelley Blue Book doesn’t expect big luxury segment shifts in July, it is noteworthy that luxury vehicles are responsible for nearly a quarter of the industry’s growth in 2014.”
“July sales are red hot and better than expected, with our forecast up about 10% over last year,” said John Krafcik, president of TrueCar. “While some of the growth is powered by incentive spending (that is) up $200 per vehicle, we are seeing continued strong demand for trucks and utility vehicles.”
Nissan is expected to show some of the month’s strongest sales gains, but General Motors is again expected to be in positive territory, despite its ongoing recall crisis.
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Chrysler, , Ford, Toyota, Honda, Kia and Hyundai are also expected to post sales gains for July. Only the Volkswagen brand is forecast to lag behind, according to True Car and KBB. VW has been in a slump for more than two years, company officials acknowledging they don’t anticipate much of a turnaround until they begin introducing key new products, such as the CrossBlue crossover.
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This year’s strong demand has been propped up, to a modest degree, by increased industry spending on rebates and other givebacks. TrueCar estimated incentive spending has increased during July to approximately $2,731 per vehicle in July 2014, up 7.1% from July 2013 — but a decrease of 0.6% from June of this year.