GM to Ford Sales Climb in Best Month for U.S. Since 2007
Stock Chart for Ford Motor Co (F)
The pace of the comeback in U.S. auto sales exceeded already rosy estimates in August, with a total surpassing any month in more than six years and a sales rate that was the fastest since 2007.
The superlatives rolled out throughout the day: General Motors Co. (GM) had its best month since 2008 and Ford Motor Co. (F) its best month of retail sales since 2006. Toyota Motor Corp. (7203) deliveries surged 23 percent, while Honda Motor Co. and Nissan Motor Co. each had their best August ever. Chrysler Group LLC sales rose for the 41st straight month.
U.S. car and light truck sales rose 17 percent to 1.5 million units, the most since May 2007, according to researcher Autodata Corp. That exceeded the 14 percent rise to 1.47 million that was the average of 10 analyst estimates in a survey by Bloomberg News. The sales rate for the month was 16.1 million, the most since October 2007, Autodata said.
“In 2007, we were achieving that sales level by giving cars away because the auto companies had too many factories,” John Casesa, senior managing director at Guggenheim Partners LLC, said today on Bloomberg Radio. “Today, there’s real demand for that product. It’s a fundamentally different industry.”
GM, Ford and Chrysler have closed unneeded factories and rolled out better cars that are drawing demand from both retail and fleet buyers, lifting the average prices paid for new vehicles to record highs. That means today’s industry is much healthier than automakers were last selling this many cars and trucks.
GM deliveries rose 15 percent, topping estimates for an 11 percent rise. Toyota sales increased 23 percent, compared with estimates for 15 percent. Ford deliveries gained 12 percent to beat the 10 percent average estimate. Honda deliveries soared 27 percent, exceeding analysts’ projected 20 percent increase.
GM rose 5 percent to $35.85 at the close in New York, while Ford advanced 3.5 percent to $16.91. The Standard & Poor’s 500 Index increased 0.8 percent.
Deliveries for Chrysler, majority-owned by Fiat SpA (F), climbed 12 percent, trailing the 13 percent average of 10 analysts’ estimates. Nissan sales surged 22 percent, exceeding seven analysts’ average estimate of 17 percent.
The annualized industry sales rate, adjusted for seasonal trends, had been projected to accelerate to 15.8 million, the average of 17 analysts’ estimates, from 14.5 million a year earlier.
Ford deliveries of F-Series pickups surged 22 percent to 71,115, the Dearborn, Michigan-based automaker said in its statement. The company exceeded the 70,000 mark for the second month this year, a feat it last accomplished in 2006.
“At August’s pace, we were selling one F-Series pickup every 42 seconds,” Ken Czubay, vice president of U.S. marketing, sales and service, said on the conference call.
Sales of the Ram pickup surged 31 percent to 33,009 and Jeep Grand Cherokee jumped 40 percent to 17,976, Chrysler said in its statement. The Auburn Hills, Michigan-based company reported gains for all five of its brands.
Deliveries of GM’s Chevrolet Silverado rose 14 percent to 43,603 and GMC Sierra gained 24 percent to 18,017. The Detroit-based automaker introduced revamped versions of the full-size trucks this year.
“There’s no question that we’re still looking at lower incentives and a richer mix with the new trucks,” Kurt McNeil, GM’s vice president of U.S. sales operations, said during its conference call.
Toyota outsold Ford and Honda exceeded Chrysler deliveries for the second consecutive month. Before July, Toyota City, Japan-based Toyota last topped Ford in March 2010 and Honda last beat Chrysler in April 2011.
Sales of Toyota’s Camry sedan rose 22 percent to 44,713, and its Prius hybrid line gained 30 percent to 27,358.
Deliveries of Honda’s Civic compact surged 58 percent to 39,458 and its CR-V utility vehicle climbed 45 percent to 34,654, driving a record August for the Tokyo-based company in the U.S.
Nissan (7201) also recorded its best-ever August, driven by 20 percent increase in Altima deliveries and 37 percent gain for the Rogue SUV. The Yokohama, Japan-based company is introducing a new version of the compact utility vehicle late this year.
The largest Japanese automakers are increasingly contending with Detroit Three competitors for retail buyers, as GM, Ford and Chrysler reduce their share of sales to fleet customers. Rental fleets used to be a dumping ground of sorts for the U.S. companies that had too much production and not enough demand for their cars.
That changed after the Detroit Three shed 29 percent of their combined capacity to build cars and trucks in North America from 2004 to 2012. They’ve also rolled out their most competitive passenger cars in a generation, led by GM’s Impala and Ford’s Fusion.
Fusion sales rose 14 percent last month. Ford plans to boost North American production in the fourth quarter by 6.8 percent to 785,000 vehicles. Third-quarter production plans were unchanged.
Auto output has contributed more than 15 percent of the growth in gross domestic product since the second quarter of 2009, Ellen Hughes-Cromwick, Ford’s chief economist, said during the company’s call today. The U.S. economic recovery began in 2009’s third quarter. Spending on cars and housing helped maintain “modest to moderate” economic expansion even as borrowing costs increased, the Federal Reserve said today.
Hyundai Motor Co. (005380) and affiliate Kia Motors Corp. (000270)’s combined deliveries rose 6.3 percent, trailing the 9.2 percent average estimate of seven analysts. The Seoul-based carmakers have trailed industrywide sales growth in every month since September.
Volkswagen AG (VOW) posted a 3.4 percent increase in combined August sales for its VW and Audi brands, according to separate statements. The Wolfsburg, Germany-based automaker trailed the average of four analysts’ estimates for a 4.4 percent gain.
For consumers with stable employment and income, it’s a “great time to be out there buying automobiles,” Jonathan Browning, the CEO of Volkswagen’s U.S. unit, said on a conference call with reporters. “There are good vehicles in the marketplace and great offers.”
To contact the reporter on this story: Craig Trudell in Southfield, Michigan at firstname.lastname@example.org
To contact the editor responsible for this story: Jamie Butters at email@example.com
Bloomberg reserves the right to edit or remove comments but is under no obligation to do so, or to explain individual moderation decisions.