June Car Sales Flirt with 16 Million SAAR
After a concerning April dip followed by an improved May, June snuffed out any doubt that U.S. car and truck sales are in full recovery.
June car sales totaled 1,402,244 vehicles, up 9 percent from last June though down 3 percent from May, which is traditionally a stronger sales month than June. The Seasonally Adjusted Annual Rate (SAAR) of sales flirted with the magical 16 million mark — 15.96 million SAAR, to be exact. That compares with a 14.3 million SAAR in June 2012 and the highest SAAR since November 2007. The last time the SAAR hit the 16-million mark was in 2007 — 16.3 million precisely.
June 2013 results surpassed industry forecasts, including Edmunds.com's forecast of 1,365,496 vehicle sales for a 15.5 million SAAR.
April car sales caused concern that the auto recovery had stalled when the SAAR slipped just below the 15 million mark for the first time since November 2012. But May car sales restored faith that the recovery was real when sales rebounded. June punctuated the recovery with an exclamation point.
The same fundamentals that have been at work for the past couple of years remain in place and are improving while other factors are aiding the cause as well. Pent-up demand, especially for trucks, continues to unleash. Credit is cheap and widely available. The new wrinkle in that story is that leasing has made a huge comeback. Like so much buzz that has come out of Washington in recent years, consumers are shrugging it off, including talk of Federal Reserve actions that would boost interest rates higher.
Consumer confidence is at a six-year high, due to more secure employment conditions as well as climbing housing prices and a booming stock market that are making consumers feel wealthier. Gasoline prices have been stable and have actually fallen. The housing, agriculture and energy sectors are in revival mode, boosting truck sales.
The tailwinds continue to be strong and are pretty forceful, said Ken Czubay, Ford's vice president of U.S. marketing, sales and service, in a conference call on June car sales with analysts and media. Added Kurt McNeil, General Motors vice president of U.S. sales operations: "We're in an economy that gets a little stronger each and every month."
DISCOUNTS, PRICES, FLEET SALES: The good news for automakers, although less so for car buyers, is the fact that outlandishly deep discounts through incentives have not been required to lure customers into car dealerships.
Average transaction prices have remained pretty strong, good for the bottom lines of automakers, parts suppliers and dealers as well as profit-sharing checks of auto workers. However, they are not at their highest levels as some reports have stated. Transaction prices usually reach their highest levels of the year in December, when sales of luxury cars and trucks boom. Edmunds.com's analysis shows June's average transaction price was $31,375, well below the $33,021 of last December. June 2013 ranked 16th on the list of all-time monthly highs for transaction prices. The June 2013 average transaction price for the industry was up $360 from last June, but it was the smallest year-over-year gain so far this year; March had the highest hike so far this year. Nor did any automaker, in contrast to some published reports, enjoy an all-time-high average transaction price in June. All are well off their previous records that mostly occurred last December.
Indeed, incentives across the industry edged lower in June from May though they were higher than the year-ago June. Edmunds.com estimates the average incentive was $2,464 per vehicle in June, compared with $2,417 in May and $2,223 in June 2012, an 11-percent year-over-year rise. Half of the Big 6 automakers had higher incentives in June than in May. Chrysler lowered incentives the most of the Big 6 from May, down 11 percent. Nissan, which said it was cutting prices on seven models including some core ones in lieu of incentives, had a 6 percent decline from May. Only Honda, always lowest on incentives, had substantially lower incentives from last June.
So far, Nissan's price-cutting move has not triggered a price war as some had predicted. And while Nissan's incentives are down overall, the Japanese automaker has added some incentives in the form of cash and low-interest financing to some models. Nissan added customer cash and extended its subsidized financing of 0.9 percent to 2.9 percent on the Nissan Rogue and added $1,000 in cash and 0.9 percent financing on the NV passenger van. It scaled back the low-interest finance range on its high-volume Nissan Altima.
Nor have fleet sales been outsized to boost overall sales. General Motors and Chrysler , in particular, have been trying to lower their reliance on fleet sales. Edmunds.com estimates fleet sales — commercial, government and rental car combined — represented 18.4 percent of total sales in June versus 19.3 percent a year ago and 17.4 percent in May.
THE RACES: Detroit automakers were clear winners in June. Ford and Chrysler had their best performances in at least six years and it was General Motors best month since September 2008, the month the Lehman Brothers collapse triggered the worst recession in recent memory. For the first time in 20 years, each of the Detroit automakers gained market share in the first half of the year. But while Detroit did well, so did the Japanese Big Three of Toyota, Honda and Nissan, all posting 10 percent plus gains in June.
Cadillac, Dodge, Porsche and Subaru had double-digit gains June-to-June. Mercedes-Benz has had 44 months of year-over-year sales increases, the most of any automaker, but Chrysler is not far behind with 39 months. Many all-time and best-June records were broken last month.
SECOND-HALF OUTLOOK: Barring something unforeseen, auto company executives and auto analysts generally expect a strong second half, a time when pickup truck sales and luxury cars come into their own, especially in December. Chrysler's head of U.S. sales, Reid Bigland, noted, as did other auto company executives on sales reporting day, that the fundamentals remain intact for gains in new vehicle sales through the second half.
"The auto industry led the economic recovery through the first half of 2013, kicking off a strong summer selling season, which we expect will carry into the second half of the year," said Bill Fay, Toyota Division group vice president and general manager.
Even moderate economic growth will be enough to keep the auto sales rate in the second half of the year at healthy levels around the mid 15 million-unit mark, said GM's chief economist said Mustafa Mohatarem. "America's families are better off than they were at the beginning of the year and they believe — with good justification — that the economic expansion is going to continue," he added.
GENERAL MOTORS: General Motors Co. sold 264,843 vehicles in the United States in June, up 6 percent compared with a year ago and, counter to the industry generally, up 5 percent from May. GM said retail sales increased 14 percent while fleet sales declined 9 percent. By division, Buick sales dropped 4 percent, though GM said its retail sales rose again for the 14th consecutive month, hitting its highest June retail sales in seven years. Cadillac climbed 15 percent. Chevrolet was up 7 percent for its best month since September 2007, and GMC rose 5 percent.
GM's strength, not surprisingly, came from trucks, which were up in total by 29 percent. GM is still winding down its 2013 Chevrolet Silverado and GMC Sierra and, in June, began selling the vastly redesigned 2014 versions. June totals included 6,600 of the new model, only available as crew cabs and with certain engines initially. In total, Silverado sales soared 29 percent to 43,259 trucks; GMC Sierra sales climbed 33 percent to 16,568 trucks.
But GM's strength didn't come solely from trucks; car sales in total rose 4 percent. Small cars had a particularly good month. Thanks in part to an attractive lease program, Chevrolet Cruze sales soared 73 percent to 32,871 cars, setting an all-time monthly sales record and zooming past the Honda Civic to top the compact car segment. In total, GM's mini, small and compact cars were up 59 percent: Buick Verano, up 10 percent to 4,489 cars; Chevrolet Sonic, up 5 percent to 7,122 units, its best-ever June; Chevrolet Spark added 3,104 sales. Chevrolet Volt had its best-ever June with sales of 2,698 vehicles, a 53-percent increase from a year ago.
GM's crossover sales were up 9 percent. The Chevrolet Equinox had its best month with sales up 14 percent to 23,645 vehicles. Equinox sales have now increased for 18 consecutive months.
Cadillac's strength came from its two new models: the ATS had sales of 3,459 cars and the XTS had sales of 2,234. The CTS is in sell-down mode so sales fell 52 percent to 2,416 cars. The new version arrives in fall. GM said Cadillac's growth is the fastest since 1976. Cadillac's other core model, the SRX, had an 8-percent decline to 3,912 units. The Chevrolet Impala, which was just launched in redesigned form and is aiming for more retail than fleet customers, had sales soar 62 percent to 17,255 units. It remained at the top of the charts in sales of large cars, albeit a shrinking market segment
GM is launching a number of new models in the coming year, noted McNeil. "We have good momentum heading into the second half of 2013: the economic outlook is solid and our launch vehicles are performing well in the marketplace."
FORD: Ford Motor Co. sales in June, 2013 were 235,643, an increase of 13 percent compared with June, 2012, as truck sales ballooned at an outsized pace but Ford's passenger cars and utility vehicles also turned in robust sales performances. Ford said, for example, that small-car sales — a compilation of Fiesta, Focus and C-Max sales figures — were up 39 percent compared with last June.
But it once again was the F-Series pickup truck line stepping up to top Ford's monthly sales chart, an indicator that construction activity continues its momentum and, apparently, that confidence in the national economy is in full revival. The F-Series sold 68,009 vehicles in June, a 24-percent leap over June, 2012 and the truck line's best June since 2005. For the first half of the year, F-Series sales, at 367,486, were up 22 percent compared with the same period in 2012 — and put Ford on a pace to perhaps sell nearly three-quarters of a million pickups this year.
Ford's utility vehicles also had a solid June, paced by a plump 28,694 deliveries for the Escape compact crossover, although in relative terms the Escape was flat compared with last June. Every other utility vehicle except for the giant Expedition posted double-digit sales increases in June, including an 11-percent hike for the Explorer midsize crossover to 15,588 sales and a 32-percent jump for the Edge crossover, where 13,579 sales challenged the Explorer.
Cars sales, up 12 percent for the month, actually exceeded the performance of Ford's utility vehicles in June, thanks to 23,144 sales for the Focus compact car and a hefty 104-percent gain, to 9,363 sales, for the Fiesta subcompact, which also was up 22 percent for the first half of the year. The Mustang slid 10 percent to 9,243 sales, however, meaning that the fuel-saving Fiesta outsold Ford's seminal muscle car in June, while Ford's best-selling car model, the Fusion midsizer, posted a rare decline, dropping a half percent on 24,313 sales. Fusion's first-half performance, with 161,146 sales, was 18 percent better compared with last year, and total sales for Ford cars in the first half were 13 percent improved.
At the upscale Lincoln sales division, June brought a generally flat performance, as total sales of 7,469 units marked a 1-percent drop compared with June, 2012 — and Lincoln's first-half sales were off 9 percent compared with the first half of last year. Despite the presence of an all-new MKZ midsize sedan, sales were up just 1.4 percent to 3,180, although the number made the new-age MKZ easily the best-selling of Lincoln's five-model lineup. The MKX midsize crossover gained 5 percent on 2014 sales in June but the MKS flagship sedan slid 17 percent and into three-figure sales territory with 906 deliveries.
TOYOTA: Toyota Motor Sales, which includes the Toyota, Lexus and Scion brands, reported June sales of 195,235 vehicles, up 10 percent from June 2012. Toyota Division sales were up 10 percent at 173,880 vehicles. The automaker claims it is No. 1 in retail sales for the fourth consecutive month. Lexus sales rose 7 percent to 21,355 vehicles. On its 10th anniversary, Scion saw sales plummet by 25 percent.
Despite the intense competition in the midsize car segment, Toyota Camry, with sales up 12 percent to a whopping 35,870 cars, had its best June since 2008 and remained the best-selling car in America. Toyota Prius sales rose 10 percent to 21079 cars; hybrids in total for all of Toyota's brands increased 19 percent. The new Toyota Avalon saw sales triple to 6,526 cars. Sales of the Corolla, which is being replaced this fall, were roughly flat at 26,458 cars. Sales of the Yaris plummeted 63 percent to a mere 747 units, missing out on surge in small car sales.
On the truck side of the portfolio, the revamped RAV4 sales soared 36 percent to 20,540 units for its best-ever June. Highlander sales rose 7 percent to 11,090. Truck sales rose nearly 14 percent with both the full-size Tundra (9,759 trucks) and smaller Tacoma 14,023 sales) posting double-digit gains. Sienna minivan sales were up 9 percent with sales of 11,722 vans. Only the Venza, 4Runner — due for replacement later this year — and Land Cruise were off.
Lexus sales were up due to big increases from its core models, the ES, up 50 percent and LS up 45 percent. The RX was flat at 8,600 units, remaining the brand's best seller. CT and GX sales also rose, but the rest of the Lexus line saw declines.
Scion, now celebrating its 10th anniversary, was the brand within the Toyota brand to experiment with ways to attract the youth market. But this year has brand of small cars has floundered while the segment has boomed. Every model in Scion's line was down significantly — but hefty double digits. Even the newly launched, highly acclaimed FR-S sports car, was down 32 percent to a mere 1,815 cars.
CHRYSLER: Chrysler Group LLC reported U.S. sales of 156,686 vehicles, up 8 percent from last June for the automaker's best June sales since 2007 and its 39th consecutive month of year-over-year sales gains. All brands posted sales increases from a year ago, with Ram posting the biggest gain — up 23 percent — for its best June since 2007. Chrysler, Jeep, Dodge, Ram (up 23 percent) and Fiat — posted sales increases from a year ago. Seven vehicles set sales records in June.
Jeep sales were up only slightly, but not because of the flap between Chrysler and the National Highway Traffic Safety Administration about recalling -- or not recalling — older Jeep Liberty and Jeep Grand Cherokee models. Indeed, Chrysler finally settled with NHTSA to recall some of the older models to apply a relatively simple and less expensive trailer hit. Instead, the brand has been handicapped by not having the replacement for the Jeep Liberty, which was dropped last August. The replacement, the Jeep Cherokee, will start registering sales in August. Meantime, as was the case in May, every Jeep model in the line was up a healthy double digits. Jeep Grand Cherokee sales soared 33 percent. Wrangler, Compass and Patriot set new June sales records.
Ram Truck brand sales were up 23 percent for its June since 2007. The Ram pickup truck had a 24-percent sales gain for its best June since 2007 and its 38th consecutive month of year-over-year sales gain. Ram cargo van had its best month since launching in 2011.
Dodge sales were up 12 percent in June, the brand's best June sales since 2007 and its 25th-consecutive month of year-over-year sales gains. Leading the charge was the Dodge Durango SUV with sales up 39 percent, the largest percentage year-over-year sales gain of any Chrysler Group vehicle in June. Sales of the Dodge Charger were up 15 percent, its best June sales since 2007. Dodge Dart pitched in sales of 6,437 cars. Viper added 97. Sales of the Avenger, Journey and Caravan were down.
Chrysler brand sales were up a scant 1 percent but enough for its best June sales since 2007. Chrysler 200 sales rose 14 percent, a June sales record. Chrysler Town & Country minivan sales were up 18 percent, its best June sales since 2006. But 300 sales were down 39 percent.
Fiat sales were also up a mere 1 percent, only because it just added the 2014 Fiat 500L, which added new sales while standard issue 500 sales were off 12 percent. Still it was Fiat's best June since its 2011 launch.
HONDA: American Honda reported sales of 136,915 in June, a 10-percent increase compared with last June, with the company posting a record June for several models. Honda's first-half sales total of 745,578 sales was up 6 percent compared to the first half of 2012.
Honda's truck models performed particularly well in June, with the CR-V compact crossover's 26,572 sales (+14 percent) and the Pilot midsize crossover's 12,085 deliveries (+21 percent) marking all-time records for June. Joining the strong sales for Honda's bigger models was the Odyssey minivan, which was up 26 percent on 14,207 sales and the Ridgeline midsize pickup, which found 1,572 buyers for a 33-percent gain.
Nor did Honda's car sales suffer because of the brand's big month for trucks. The Accord midsize sedan was up 10 percent to 31,677 sales and the Fit subcompact car also gained 10 percent on the strength of 5,055 sales. The Civic compact car moved 29,724 examples, which represented a 8-percent increase compared with June, 2012. The Accord finished the first half of 2013 up 20 percent compared with last year, its 186,860 deliveries pacing it to easily be one of the industry's top-selling models for the year.
The only decliners on Honda's entire sales sheet were the fading Insight hybrid, which dipped to just 384 sales, the CR-Z hybrid coupe, dropping 4 percent to 393 sales and the Crosstour wagon, which was off 190 percent to 1,479 sales.
At the Acura premium-vehicle unit, total June sales came to 13,765 units, a 10-percent slide compared with last June. Every Acura model save the all-new RLX flagship (up a gaudy percent on 499 deliveries), the ILX compact sedan (up 39 percent to 1,507 sales) and the still-surging RDX compact crossover (+30 percent to 4,023 deliveries) was off for the month. Sales for the TL sedan plunged 36 percent to 2,156 and the usually reliable TSX dropped 34 percent on 1,708 sales. Even the popular MDX midsize crossover declined by double digits to 3,828 sales as informed intenders may have been waiting for the re-done 2014 model to come on stream.
NISSAN: Nissan sold 101,124 vehicles in June 2013 as the company instituted reducing pricing on numerous models. The performance marked a June record for Nissan and a 13-percent gain compared with June 2012. The company said several nameplates, including the Altima midsize sedan, the Leaf electric car and redesigned Pathfinder large crossover, set new June sales records.
Nissan's popular Altima seemed to be an immediate beneficiary of the company's lower MSRPs — transaction prices, as throughout much of the industry, increased compared with May and year-ago figures — as Altima sales were boosted 23 percent to 26,904 to run neck-and-neck with Ford's competing Fusion. The recently redesigned Sentra was up 11 percent to 10,199 sales, although the smaller Versa sedan was flat at 8,705 deliveries, as Fred Diaz, Nissan divisional vice president for sales and marketing, noted that supply of the Versa Note (the hatchback body style of the Versa) was just arriving at dealers toward the end of June.
While Nissan also got a strong June performance from the Leaf electric vehicle (+ 316 percent to 2,225 units) Pathfinder (up 209 percent to 8,360 sales) and soon-to-be-updated Rogue (+41 percent to 15,518 sales), several of the company's mainstream nameplates continued to exhibit weakness, including the Murano midsize crossover, which dropped 29 percent to 3,178 sales and the declining Maxima large car, which found just 3,571 buyers in June for a 23-percent slide.
Also losing ground in June were Nissan's pickups, with the full-size Titan plunging to just 1,300 sales — a 44-percent decline for the month that closed a first-half slide for the Titan of 17 percent to 8,852 units. The Frontier midsize pickup dropped 4 percent in June and was flat for the first half at a total of 29,316 sales.
Nissan officials noted both the Pathfinder and the Leaf already exceeded their full-year performances of 2012 in just the first half of this year. Other first-half gainers included the Sentra compact car, up 19 percent on 66,439 sales and the Altima, up 7 percent to 167,787. In all, the Nissan division marked 572,476 deliveries in the first half, a 9-percent gain.
For Nissan's Infiniti upscale unit, June was not of the record-breaking variety, as the division's total sales were off 13 percent to 9,114 units. Every Infiniti model declined for the month, led by a sharp 42-percent decline for the EX compact crossover, which convinced just 151 buyers in June. Infiniti's popular G37 midsize sedan dropped 7 percent to 3,659 sales and its coupe counterpart swayed 1,071 buyers, a sharp 21-percent decline. Infiniti projects an improved second half as the Q50 replacement for the G37 hits showrooms in late summer and a hybrid variant of the QX60 full-size crossover arrives in the fall.
HYUNDAI: Hyundai Motor America posted 65,007 sales in June, a small 2-percent gain compared with June, 2012 that nonetheless marked the brand's best-ever June for U.S. sales. The month also capped Hyundai's best-ever first-half sales, with 361,010 vehicles sold, 1 percent better than for the same period last year. Hyundai's record June push was sustained almost entirely by two models: the Elantra compact car, which soared 26 percent to 22,163 sales and the Santa Fe midsize crossover, where 7,656 sales marked a 14-percent gain. The Santa Fe midsize crossover posted a 14-percent gain on 7,656 deliveries.
Sales for every other Hyundai model retreated in June.
June decliners for Hyundai included the recently redesigned Azera large car, dropping 19 percent to 813 sales, a 13-percent slide for the Genesis line to 2,938 units and a 15-percent decline for the Veloster coupe.
The Tucson compact crossover also was off by 10 percent in June to 3,800 sales and the popular Sonata midsize sedan dropped below the 20,000-unit mark with 19,454 sales, a 7-percent slide.
First-half sales for Hyundai were a bit more evenly distributed, although the Elantra and Santa Fe shouldered most of the load in keeping the brand's first-half sales ahead of the same period in 2012. The Elantra, in particular, was a standout with its 29-percent improved sales over the first half of last year, moving 126,244 units in the first six months.
KIA: June marked a rare month of sales decline for Kia Motors America, with sales of 50,536 representing a 2-pecent slide for the company that spent most of the past two years setting consecutive year-over-year sales records. Kia's first-half total sales also slipped in comparison to the same period in 2012, with 277,351 units sold marking a 4-percent retreat from the first six months of last year.
In June, Kia got a nice performance from the best-selling Optima midsize sedan; the Optima's 14,599 sales were a 9-percent improvement compared with last June. The Rio subcompact contributed a 14-percent uptick on 4,169 sales. And the all-new Cadenza flagship finished the month with 1,001 new sales to add to the brand's total. Except for the Soul compact hatchback (+11 percent on 11,287 units), sales slid in June for each of Kia's remaining models.