Automakers have begun reporting their U.S. sales figures for July and the overall trend emerging is one of positive-- if not robust for at several OEMs-- increases from the same month a year ago.
According to analyst Noel Perry, senior consultant with FTR Associates and principal of Transport Fundamentals, trucking is now benefitting from what he terms a “good” recovery under way for durable goods. He explained that much of the credit for that is owed “to the recovery in auto and light-truck sales—which are now in the 14-million [unit] range.”
Indeed, Chrysler Group LLC has reported that its U.S. auto sales climbed 13% in July, with double-digit gain driven by rising sales of its Chrysler 200 (+43%)and Chrysler 300 s(+41%) sedan models. The OEM’s truck sales increased 11% and its car sales leapt 19%.
Bloomberg reported that, given the estimates of eight analysts, Honda may finish the month highest with a 41% gain in sales, followed by a 25% increase scored by Toyota. Bloomberg noted that “Vehicle shortages for Toyota and Honda [due to the Japanese earthquake and tsunami] sapped inventories for other automakers last year and deterred some buyers who waited for better selection of models.”
Overall, according to Edmunds.com, U.S. new auto sales for July are forecast to increase 10% from the year earlier while slipping 9.2% from the month before.
“Chrysler finished the month with a 65-day supply of inventory, per a report posted by The Wall Street Journal. “It also estimated the industry's U.S. sales in July at a seasonally adjusted annualized rate of 14- million units”—the same as predicted by FTR’s Perry.
According to the latest auto sales forecast by Edmunds.com, an estimated 1,166,665 new autos will have been sold in July, making for a Seasonally Adjusted Annual Rate (SAAR) of 14-million light vehicles. “The projected sales would be a 9.2% decrease from June 2012, but a 10.2% increase from July 2011— even with two fewer selling days, year over year,” noted Edmunds.com.
And the latest monthly sales forecast developed by J.D. Power and Associates' and LMC Automotive holds that July new-vehicle retail sales are projected to come in at 969,200 units, which represents a SAAR of 11.5 million units. “The selling rate is a decline from June, but is on pace with the expected level for 2012, the report stated, noting that retail transactions are the” most accurate measurement of true underlying consumer demand” for new cars and light trucks.
"Retail sales got off to a fast start in July, and while they've slowed down a bit as the month has progressed, through the first 16 selling days, they're still up 15.1&, compared to July 2011," said John Humphrey, senior vice president of global automotive operations at J.D. Power and Associates. "The positive growth has continued to build, as July is looking strong across most vehicle segments, as well as for many of the major manufacturers."
"July generally has the lowest mix of fleet sales every year, so this month tested the strength of the retail market," pointed out Edmunds.com senior analyst Jessica Caldwell. "With a pace that's still on track for around 14-million vehicles, it's a good sign that fleet [sales] is not carrying the industry.” In other words, the retail market for cars and light trucks is showing continued strength.
Caldwell pointed out that July's low fleet sales levels will impact individual automakers this month. Edmunds.com projects that each of the Big 3 U.S. manufacturers will lose market share in July while the Japanese Big 3 will show gains.
"Because domestic automakers tend to have a higher percentage of fleet sales, it's no surprise that their market shares will all take a hit this month," said Caldwell. "But with new product launches driving today's ultra-competitive retail environment between automakers, it will be that much more difficult to recover any lost market share."
“The pace of new-vehicle sales remained steady in July despite the mixed economic news, helped by the compelling selection of vehicles and highly optimized incentive programs,” said Jesse Toprak, vice president of market intelligence for TrueCar.com, who was quoted in a post by The Wall Street Journal’s MarketWatch.
Bloomberg also reported that, according to Mick Jackson CEO of AutoNation (the largest U.S. new-vehicle retailer) the “pent-up demand that helped fuel the U.S. auto market’s growth since industry sales fell to a 27-year low in 2009 is starting to show in the housing market” as well.
Per Bloomberg, the Commerce Dept. stated that housing starts rose 6.9% to a 760,000 annual pace in June, the highest level in almost four years. And the, National Association of Home Builders/Wells Fargo Index showed on July 17 that “Confidence among U.S. homebuilders increased in July by the most since September 2002.”