Toyota leads gains in strong July for automakers
General Motors says its July U.S. sales rose 16 percent on big gains in full-size pickup trucks, though it was still short of the lofty 19 percent growth forecast by analysts.
GM's increase still leads almost all automakers that reported numbers on Thursday—except Toyota, which reported a 17 percent increase.
The combination of an improving economy and a rebound in the housing market drove auto sales in July to their highest level since 2006. The expectation is for an annual sales pace of between 15.8 and 16.1 million vehicles.
Consistent with the trend this year, strong demand for pick-up trucks is fueling much of the surge in sales. Sales of GM's Chevrolet Silverado and GMC Sierra pickups combined rose 46 percent to almost 99,000. Chrysler's Ram pickup sales increased 31 percent in July while Ford F-Series pickup sales were up 23 percent, or one of every three vehicles the company sold.
July Auto Sales
Ford also cited strong demand for the newly redesigned Fiesta subcompact, with sales up 89 percent, as well as the F-Series pickup in its total sales of 193,715 vehicles in July. Chrysler said it sold just over 140,000 cars and trucks last month, led by pickup truck and SUV sales. It was the best July in seven years for both Chrysler and Ford.
Most industry analysts expect July sales to rise around 15 percent from a year ago. A performance that strong will signal that the industry's momentum can carry through the second half of the year.
GM says passenger car sales were up 24 percent over a year ago. The Chevrolet Impala saw a 38 percent sales increase as new models reached showrooms. Sales of the Cadillac and Chevrolet brands each rose about 17 percent, while GMC sales rose 14 percent. Buick sales also increased 14 percent.
Chrysler's Jeep Grand Cherokee sales rose 30 percent, the SUV's best July since 2005.
The Escape SUV, which is one of Ford's top sellers, was up 4 percent over last July, while Lincoln sales were flat, with the new MKZ sedan down 7 percent.
Chrysler had strong retail sales to individual buyers during the month, particularly in pickups and SUVs, said Reid Bigland, the company's U.S. sales chief. It was Chrysler's 40th straight month of year-over-year sales growth.
Chrysler is predicting that industry sales in July will run at an annual rate of 15.8 million vehicles.
"We're almost at a pre-recession pace that looks like it may have the momentum that will carry it through the second half of the year and beyond," said Alec Gutierrez, senior market analyst for Kelley Blue Book.
The consulting firm LMC Automotive said the second-half tail wind could push this year's sales to around 16 million. Sales last topped 16 million in 2007, just ahead off the recession. They bottomed out at a 30-year low of 10.4 million in 2009, and have been recovering ever since.
A combination of low interest rates, an improving economy, rising consumer confidence and increasing home values in many areas is driving sales. In addition, automakers have been rolling out appealing new products in every segment from subcompact cars to big pickup trucks.
(Read more: Car Sales on a Roll, but the Economy? Not So Much)
Sales of pickup trucks are especially strong, which helps the Detroit automakers. Sales of compact and subcompact cars as well as compact crossover SUVs are expected to also show healthy gains, Gutierrez said. Total pickup truck sales could rise as much as 30 percent in July, he said. Edmunds.com says last month may have been the strongest July in seven years.
Incentives are helping sales. Rebates and low-interest loans in July rose nearly 8 percent over a year ago to $2,684 per vehicle. That's the highest level of the year, said Jesse Toprak, senior analyst for the TrueCar.com auto pricing site.
Overall, though, the discounts haven't cut prices. The average sale price of a vehicle last month held steady at just over $31,000, Toprak said. That's because buyers are loading up on options, which boosts the price, he said. To get lower monthly payments with a higher price, buyers are stretching out their loans and leasing more vehicles, according to LMC.
Thirty percent of car loans now are six years or longer, up from 29 percent in the first half of last year. Leasing, which generally lowers monthly payments, accounts for 24 percent of auto sales, up from 21 percent a year ago, LMC said.
At Chrysler, sales of the Jeep Compass and Patriot small SUVs were each up close to 30 percent as well. But some of the company's other models in key segments saw sales declines, including the Chrysler 200 midsize car, which was down 13 percent.