Chrysler Extends U.S. Growth Streak as Ford Gains 13%Craig Trudell and Mark Clothier
Chrysler Group LLC, the third-largest U.S. automaker, extended its streak of U.S. sales gains in June and predicted demand in its largest market will keep growing even if accommodative monetary policy is scaled back.
Deliveries for Chrysler, majority owned by Fiat SpA, rose 8.2 percent to 156,686 vehicles, matching the average of 10 analysts’ estimates in a survey by Bloomberg News. Ford Motor Co. sales of cars and light trucks climbed 13 percent to 234,917, beating the 12 percent increase that was the average of 11 estimates.
Chrysler’s U.S. deliveries have gained for 39 consecutive months, boosting an auto market that’s on pace for its best year since 2007 as Americans replace the oldest vehicles ever on U.S. roads. Pent-up demand, attractive financing offers and an improving economy will keep propelling industry sales as the Federal Reserve winds down its unprecedented easing programs, said Reid Bigland, Chrysler’s U.S. sales chief.
“The fundamentals for continued growth in the new vehicle sales industry are intact,” Bigland 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.”
Chrysler’s Ram pickup deliveries surged 24 percent to 29,644, its best June total in six years, the Auburn Hills, Michigan-based company said today in a statement. Deliveries of the Jeep Grand Cherokee sport-utility vehicle surged 33 percent to to 16,626 and the Dodge Durango SUV 39 percent to 4,590.
Chrysler forecast an annualized industry sales rate, adjusted for seasonal trends, of 16 million for June. That projection includes medium- and heavy-duty vehicles, which typically account for at least 200,000 deliveries per year.
U.S. light-vehicle sales may have climbed 7.1 percent to 1.38 million, the average of 10 estimates in the Bloomberg survey. The industry sales rate may have risen to 15.6 million, the average of 17 estimates, from 14.4 million a year earlier. That would be the best monthly pace since 15.8 million in December 2007, according to researcher Autodata Corp.
The projected growth in June probably was led by Nissan Motor Co. and Ford, according to analysts. Ford, Chrysler and General Motors Co. paced much of the industry’s expansion through the first five 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.
Ford has gained the most share of any automaker in the U.S. this year. Joe Hinrichs, head of the Americas for the Dearborn, Michigan-based company, told reporters June 27 that industry sales may have slowed the preceding week and pinned it on signaling by the Fed.
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.
“The industry was really strong in the first half of the month, but maybe slowed a bit in the last week,” Hinrichs said. “It will be interesting to watch where consumer confidence goes as the market kind of fluctuated in the last week and they talk around eventually higher interest rates, and what that means for consumers’ buying confidence.”
Nissan probably led all automakers with a 13 percent increase in U.S. sales, the average of eight estimates. The Yokohama, Japan-based company’s deliveries surged 25 percent in May, triple the industrywide increase, after cutting the price of seven models, including its top-selling Altima sedan.
GM, fresh off the industry’s best showing in a closely watched quality survey, may have sold 2.1 percent more vehicles in June than a year earlier, the average of 11 estimates. The Detroit-based automaker passed Toyota Motor Corp. and led J.D. Power & Associates’ Initial Quality Study for the first time.
Toyota sales probably rose 6.2 percent, the average 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 Motor Co. deliveries may have climbed 10 percent, the average 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. and its affiliate Kia Motors Corp. may have slipped 1.7 percent in June, the average estimate of seven analysts. The Seoul-based carmakers have trailed industrywide sales growth in every month since September as they contend with production constraints and more competitive U.S. automakers.
Volkswagen AG, based in Wolfsburg, Germany, may post a 0.9 percent drop in combined sales for its VW and Audi brands in June, the average of four estimates.