With motorists facing new worries over rising gasoline prices, sales of fuel-efficient passenger cars perked up in June, while General Motors Co. surprised some observers by posting a modest 1% sales increase despite its ongoing recall crisis.
Chrysler, Toyota, Nissan and Hyundai also reported sales increases in June, while Porsche reported its best-ever numbers for the month. On a seasonally adjusted basis, June saw the industry operating at a 16.6 million annual rate, well ahead of the industry’s overall performance for the first half of the year. Were that figure to hold, the industry would sell nearly 1 million more vehicles than it did in 2013. Meanwhile, consumers wound up paying more than ever for their new vehicles in June, according to industry analysts.
There had been concern that June might bring a slowdown to the rapid recovery of the U.S. automotive market, in part due to worries about fuel prices. Some analysts, meanwhile, were predicting that GM would go into the negative column because of its ongoing recall crisis. It ended the month by announcing four new recalls covering 7.6 million vehicles in the U.S. alone. GM has now had 54 separate recalls since January, covering about 26 million vehicles in the U.S., and 29 million worldwide.
(GM drives U.S. automakers to record level of recalls – in just six months. Click Here for the story.)
But while it was earlier forecast to come in about 1% below year-earlier sales levels, GM eked out a 1% increase, noted Kurt McNeil, U.S. vice president of Sales Operations, adding that, “June was the third very strong month in a row for GM, with every brand up on a selling-day adjusted basis. In fact, the first half of the year was our best retail sales performance since 2008, driven by an outstanding second quarter.”
McNeil said the figures also indicated that commercial and small business customers are expecting a strong second half of the year and they are building their fleets to meet demand.
“Sales in the first half of 2014 indicate a steadily recovering industry, and we expect this pace to increase as we move into the second part of the year,” said Bill Fay, Toyota division group vice president and general manager. “In June, Camry and Corolla posted double-digit gains as passenger cars showed renewed strength industry-wide,” he added.
Ford, while posting a disappointing 6% sales drop for June, said sales of its midsized Fusion sedan increased 14%.
(Hyundai’s Alabama plant struggles to keep up with demand as US auto market surges. Click Here for more.)
Chrysler reported a 9% increase, marking the group’s best June sales since 2007 — while extending Chrysler’s streak of year-over-year sales gains to 51-consecutive months.
Like many of its competitors, Chrysler saw some of the strongest demand for the all-new models just coming into its line-up. The all-new 2015 Chrysler 200 midsize sedan is off to a strong start as inventory continues to build at Chrysler dealerships. The average 200 lasts on dealer lots just 12 days, according to Reid Bigland, Chrysler vice president of sales, compared with the normal 60-day turnover.
Meanwhile, sales of the new 2015 A3 boosted Audi’s sales 23% in June. Audi sales for the first-half of 2014 have been the best in the luxury maker’s history.
But Audi’s mainstream sibling, Volkswagen, posted one of the few declines in June, continuing a generally downward trend it hasn’t been able to reverse since 2012. But despite its 22% drop in June, VW did have one bright spot, the all-new 2015 Golf and GTI models posting their best sales since June, 2006.
“Nissan’s sales growth shows that we’ve found the right equation for success: the right vehicles plus a great group of dealers who are absolutely committed to our customers,” said Fred Diaz, Nissan’s senior vice president of Sales and Marketing & Parts and service. “Retail sales gains in June drove Nissan to its 15th monthly record in the last 16 months.”
In contrast to some of its rivals, Nissan’s increase was based on healthy sales of its passenger cars as the Versa, Sentra and Altima all registered increases. Trucks – especially full-size pickups have been responsible for much of the overall industry momentum this year.
(Daimler, Nissan team up to build new luxury plant in Mexico. Click Here for the full story.)
Total new-vehicle retail sales in the United States increased 6% over the first half of 2013, according to an analysis by J.D. Power.
Transaction prices –what consumers actually pay after factoring in options and incentives — reached record levels for the first half of the year, averaging $29,630 per vehicle, an increase from $28,880 a year ago. Consumer expenditures on new vehicles through the first half of the year also are at a record high of $194 billion, a $14 billion dollar increase from the same period in 2013.
Automakers and lenders are helping buyers afford these higher prices by providing longer loan term options. Loans with terms of at least 72 months account for 31.8% of retail sales in the first half of 2104, up from 30.2 percent in 2013, according to data collected by J.D. Power.
J.D.Power vice president Thomas King said retail sales at the beginning of 2014 were hampered by extreme weather conditions, but spring has brought a string of record-setting months, as sales have increased on a year-over-year basis for each of the first six months of 2014.
Total sales through the first half of 2014 are expected to have reached 8.1 million, a 4% increase over the same period in 2013, based on a sales forecast developed by J.D. Power and LMC Automotive.
New-vehicle demand in the first half of 2014 has been robust, as evidenced by both strong sales and record transaction prices,” King added. “Looking forward, we expect that strong sales momentum to carry into the second half of the year.”
(Paul A. Eisenstein contributed to this report.)
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