General Motors Co. (GM) and Ford Motor Co. (F), makers of the best-selling big pickups in the U.S., said new-vehicle deliveries in June topped estimates as the industry selling pace accelerated to the fastest in 67 months.
Ford sales of cars and light trucks gained 13 percent to 234,917, beating the 12 percent increase that was the average of 11 estimates. GM deliveries rose 6.5 percent to 264,843, exceeding the 2.1 percent average estimate of 11 analysts. Sales climbed 9.8 percent for Toyota Motor Corp. (7203), 9.7 percent for Honda (7267) Motor Co. and 8.2 percent for Chrysler Group LLC.
Americans are buying new cars and trucks at the fastest rate since 2007 as they replace the oldest vehicles ever on U.S. roads. Ford, Chrysler and analysts said they expect replacement of older models, attractive financing offers and an improving economy will keep propelling industry sales as the Federal Reserve winds down its unprecedented easing programs.
“The same factors are still in place: Pent-up demand is unleashing, credit is cheap and widely available, and in terms of trucks, it’s all about the economy recovering and housing starts,” Michelle Krebs, an analyst at auto researcher Edmunds.com, said in a telephone interview.
U.S. light-vehicle sales climbed 9.2 percent to 1.4 million, exceeding the 1.38 million average estimate of 10 analysts in a survey of analysts by Bloomberg News. The industry sales rate surged to almost 16 million, exceeding the 15.6 million average estimate of 17 analysts. That’s the best monthly pace since 16.1 million in November 2007 and compares to 14.4 million a year earlier, according to researcher Autodata Corp.
Sales of Ford F-Series pickups surged 24 percent to 68,009, the Dearborn, Michigan-based company said in a statement. GM’s Chevrolet Silverado climbed 29 percent to 43,259. Ram pickup deliveries increased 24 percent to 29,644 for Chrysler, which is majority owned by Fiat SpA. (F)
Ford rose 2.8 percent to $16.18 at the close in New York, while GM gained 0.3 percent to $34.10. Ford has climbed 25 percent this year and GM has increased 18 percent, exceeding a 13 percent rise in the Standard & Poor’s 500 Index.
Federal Reserve Chairman Ben Bernanke said last month that the Fed will probably taper its $85 billion monthly bond-buying program later in 2013 and halt purchases around mid-2014, citing a slowly improving economy. Still, most members of the central bank committee don’t expect to begin raising the benchmark lending rate out of its lowest-ever range of zero to 0.25 percent until 2015.
Replacement demand and “historically low interest rates irrespective of the conversations surrounding the Fed” are fueling continued growth for the auto industry, Ken Czubay, Ford’s vice president of U.S. marketing, sales and service, said today on a conference call. “The tailwinds continue to be strong” and are “pretty forceful,” he said.
Sales growth in June was led by Ford and Nissan (7201) Motor Co., in line with a survey of analysts by Bloomberg News. Ford, Chrysler and GM paced much of the industry’s expansion through the first six months of the year, with all three gaining market share. The last time all three finished the first half of a year having increased share was 1993, according to Automotive News Data Center.
Nissan deliveries increased 13 percent in June, the automaker said in an e-mailed statement, matching the average of eight estimates. The Yokohama, Japan-based company’s rise followed a 25 percent surge in May, which tripled the industrywide increase that month, after cutting the price of seven models.
The price reductions by Nissan included the Altima sedan, the company’s top-selling model. Altima deliveries rose 23 percent to 26,904 in June.
Sales for Chrysler, the third-largest U.S. automaker, have increased for 39 consecutive months. The Auburn Hills, Michigan-based automaker’s gain in June matched the average of 10 analysts’ estimates.
“The fundamentals for continued growth in the new vehicle sales industry are intact,” Reid Bigland, Chrysler’s U.S. sales chief, told reporters June 28 in Chelsea, Michigan. “The availability of credit for automotive loans is as good as it’s ever been. Pent-up demand is still a big factor out there. Even this telegraphing a little bit of tapering is a sign that the economy is getting better.”
GM’s deliveries in June were higher than any month since September 2008, when Lehman Brothers Holdings Inc. went bankrupt, the Detroit-based automaker said today in a statement.
“American families are better off than they were at the beginning of the year,” Kurt McNeil, GM’s vice president of U.S. sales operations, said on a conference call today. “They also believe that the economic expansion is going to continue, so they’re buying more homes and more cars and trucks.”
Toyota sales topped the 6.2 percent of eight estimates. The Toyota City, Japan-based company sees stable rates for auto buyers in the near term, Bill Fay, group vice president for U.S. sales, said last month on Bloomberg Radio.
Honda’s deliveries trailed the 10 percent average increase of eight estimates. Competitors may have a tougher time offering no-interest financing that Tokyo-based Honda Motor doesn’t offer once the Federal Reserve does begin raising interest rates, said John Mendel, Honda’s head of U.S. sales.
“If you’re a manufacturer that depends on zero percent financing to do your business, that proposition is going to get more and more expensive,” Mendel said last week in a telephone interview.
Combined sales for Hyundai Motor Co. (005380) and its affiliate Kia Motors Corp. (000270) rose 0.4 percent in June, beating seven analysts’ average estimate for a 1.7 percent decline. Deliveries for the Hyundai brand rose 1.9 percent while Kia’s slipped 1.5 percent, the Seoul-based companies said in separate statements.
Volkswagen AG (VOW), based in Wolfsburg, Germany, said combined sales for its VW and Audi brands in June dropped 0.3 percent, beating the 0.9 percent decline that was the average of four estimates.
To contact the editor responsible for this story: Jamie Butters at email@example.com