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Honda Leads U.S. Car-Sales Gains Amid Rebound at Toyota

Honda Motor Co.’s U.S. sales recovery accelerated in July with the market’s biggest volume gain, helping automakers stay on pace for their best year since 2007.

Honda, Japan’s third-largest carmaker, posted an increase of 45 percent, beating the 41 percent average of eight analysts’ estimates compiled by Bloomberg. Sales advanced 26 percent at Toyota Motor Corp. (7203), which like Honda saw deliveries plunge after natural disasters cut parts supplies a year ago, and 16 percent at Nissan Motor Co. Toyota and Nissan also exceeded estimates.

“It really shows how loyal Honda buyers are -- more loyal than we gave them credit for,” said Jesse Toprak, an analyst at TrueCar.com, an automotive pricing and data company in Santa Monica, California. “Not only is Honda winning back market share, they’re doing it faster than anyone expected.”

Sales of new cars and trucks, a bright spot amid a tepid U.S. economic recovery, grew 8.9 percent in July to 1.15 million units, researcher Autodata Corp. said yesterday. The improvement, buoyed by gains for Japan’s Toyota, Honda and Nissan, keeps the industry headed for annual deliveries of more than 14 million, the most in five years.

Hyundai Motor Co. (005380), among the fastest-growing brands in the U.S. during the past three years, reported a 4.1 percent sales increase, while affiliate Kia Motors Corp. (000270)’s rose 5.6 percent. The combined 4.8 percent gain for the two, which operate separately, beat six analysts’ average estimate of a 0.9 percent increase.

Market Share

Chrysler Group LLC, controlled by Italy’s Fiat SpA (F), led gains for U.S.-based carmakers, with sales up 13 percent. General Motors Co. (GM), the largest U.S. automaker, reported a 6.4 percent decline and Ford Motor Co. said sales fell 3.8 percent.

U.S. market share for Japanese and South Korean automakers rose to 46.9 percent last month from 42.8 percent a year earlier, according to Woodcliff, New Jersey-based Autodata. Combined share for GM, Ford and Chrysler narrowed by 4.5 percentage points to 43.1 percent.

Honda and Toyota lost production and sales in the year- earlier month after the March 2011 earthquake and tsunami in their home country reduced shipments of vehicles and parts. Flooding in Thailand later in the year worsened the disruption.

Toyota’s Comeback

Sales of the Toyota, Lexus and Scion brands rose to 164,898 from 130,802 a year earlier, the Toyota City, Japan-based company said. Toyota’s Camry, the best-selling car in the U.S. for more than a decade, had an 11 percent gain, while deliveries of the four-model Prius line more than doubled to 16,643.

Lexus, which trails Bayerische Motoren Werke AG’s BMW and Daimler AG’s Mercedes-Benz after leading U.S. sales of luxury vehicles for 11 years before 2011, had a 25 percent increase, led by its top-selling RX crossover.

“We’re right on the plan we had forecasted at the beginning of the year,” Mark Templin, head of U.S. Lexus sales, said on a conference call yesterday. “It’s all predicated on the launch of new products. We look for big things in the next four months.”

Toyota’s U.S. sales through July rose 28 percent to 1.21 million, ahead of its 15 percent full-year target. Bill Fay, group vice president of U.S. Toyota-brand sales, said the company may revise the goal after August results are released.

Incentive Spending

Toyota led full-line automakers by reducing spending on discounts and promotions by 24 percent to $1,849 per vehicle in July, compared with an industrywide average of $2,482, Autodata said. The company’s July market share was 14.3 percent, up two percentage points from a year earlier, according to Autodata.

The automaker’s shares rose 2.5 percent at 12:58 p.m. in Tokyo. Nissan gained 2.3 percent and Honda added 0.1 percent. The benchmark Nikkei 225 Stock Average climbed 0.2 percent.

“The results are solid,” Koichi Sugimoto, Tokyo-based analyst of BNP Paribas, said in a phone interview. “The competition will get tougher in the second half this year, but with new products in the market, they will still be on the track of recovery from last year’s disasters.”

Honda’s surge last month was led by higher sales of Accord sedans, Civic small cars and CR-V sport-utility vehicles. The Tokyo-based company reported sales of 116,944 vehicles, up from 80,502 a year earlier.

Accord, the brand’s flagship model, edged back ahead of Nissan’s Altima in July after trailing its rival for more than a year. Accord sales this year totaled 183,817, compared with 183,703 for the Altima. Toyota’s Camry leads both, with sales of 243,816 through July.

Midsize ‘Dogfight’

A revamped Altima went on sale last month and a new Accord is due in September.

“It’s a dogfight in the midsize sedan category,” said Toprak, the TrueCar analyst. “It’s the most competitive segment overall this year, by far.”

Accord sales rose 70 percent, Civic grew 79 percent and the CR-V small crossover had a 47 percent increase. Honda’s July market share rose to 10.1 percent from 7.6 percent a year earlier, according to Autodata.

Deliveries for Yokohama, Japan-based Nissan were 98,341 last month, compared with 84,601 a year ago. The company’s increase was helped by the revamped Altima and higher sales of compact Rogue crossovers, Al Castignetti, vice president of U.S. sales, said in a telephone interview.

Nissan, Hyundai

Sales of Altimas should rise for the rest of the year as production of the revamped sedan from plants in Tennessee and Mississippi expands, he said.

“The inventory has been building a little slower than I hoped,” Castignetti said. The company’s 26,602 Altima sales included just 8,600 of new 2013 models, he said. Inventory of the outgoing model is about 10,000 units at the start of this month, so “the selldown is in extremely good shape,” he said.

Nissan’s market share was 8.5 percent in July, up from 8 percent, Autodata said.

Hyundai and Kia, both based in Seoul, South Korea, may see their U.S. sales “flatten out” for the rest of 2012 because of limited inventory, said Alec Gutierrez, an analyst for Kelley Blue Book in Irvine, California.

“Hyundai and Kia have grown so much the past couple years, but they’ve finally reached the limits of what they’re able to produce,” Gutierrez said.

While Hyundai’s 62,021 sales in July were a record for the month, the company grew slower than the industry, cutting its market share to 5.4 percent from 5.6 percent a year earlier. Similarly, Kia’s market share shrank 0.1 point to 4.2 percent even as its sales rose to 48,074 from 45,504.

“A tight inventory situation might be a good problem to have, but it’s still a problem,” Toprak said.

To contact the reporter on this story: Alan Ohnsman in Los Angeles at aohnsman@bloomberg.net

To contact the editor responsible for this story: Jamie Butters at jbutters@bloomberg.net

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