Vehicle sellers keep driving - Coeur d'Alene Press: Local News

Vehicle sellers keep driving

Automakers sold nearly 1.3 million cars, trucks in June

Print
Font Size:
Default font size
Larger font size

Posted: Wednesday, July 4, 2012 12:15 am | Updated: 11:40 am, Fri Nov 16, 2012.

COEUR d'ALENE - From mini cars to monster pickups, sales of new cars and trucks surged in June and eased concerns that Americans would be turned off by slower hiring and other scary headlines.

Automakers sold nearly 1.3 million cars and trucks in June, up 22 percent from the same month last year. Chrysler posted its best June in five years. Sales soared at Volkswagen, which is on track for its best year in the U.S. since 1973.

The results allayed fears that growth would stall after a strong start to 2012. Earlier this spring, sales were on track to reach 14.5 million this year, boosted by mild weather and the post-earthquake return of Japanese cars to dealers. But the pace dropped to 13.8 million in May, as the stock market plunged and hiring slowed. In June, there was more bad news about jobs growth, and consumer confidence fell for the fourth straight month.

But buyers didn't go away. June's sales pace rose to 14.1 million, according to Autodata Corp.

The upward trend has held up locally, too.

Actually, it has been a consistent upward tick all year, said Eve Knudtsen, president of Knudtsen Chevrolet in Post Falls.

Her business sales are up 39 percent this year compared to last, which she attributed to a number of factors, such as banks easing up on loan requirements, more fuel efficient models hitting the market, and the average car on the road last year being 11 years old, meaning it was time for consumers to replace their rides.

"It's kind of like a perfect storm," she said. "We've been on a consistent pace all year."

And nationally, if sales stay at that rate for all of 2012, it will be the industry's best year since 2007.

Falling gas prices also helped the buyer's market. So did a revived housing market, which lifted sales of pickups. And there was still plenty of demand from people who bought cars in the middle of the last decade and needed to replace them. Annual sales hit a high of 17 million in 2005, and those cars and trucks are now seven years old.

"If a family in Iowa's only mode of transportation is on the fritz, they are going to buy a replacement vehicle, even if Spain's economy is on the brink of collapse," says Alec Gutierrez, a senior market analyst at Kelley Blue Book.

Automakers also started their Independence Day promotions a little early and that juiced sales at the end of the month.

"In the last two weeks we really went all-out," says Bill Underriner, who sells Volvo, Buick, Honda and Hyundai cars in Billings, Mont.

Colorful ads with holiday deals excited buyers, says Jessica Caldwell, a senior analyst with pricing site Edmunds.com. The Buick Verano small car - one of Underriner's big sellers last month - is now $239 per month for a two-year lease. That's $50 less than usual.

Low interest rates are making deals like the Verano's more attractive. The average interest rate on a 60-month new-car loan is 4.5 percent, down from 6.98 percent two years ago, according to Bankrate.com. Credit availability is also improving.

"The affordability of cars is probably at an all-time high," Chrysler Group sales chief Reid Bigland said last week.

Falling gas prices meant buyers were more likely to consider bigger cars and SUVs in June, not just the small cars that sold well at the beginning of the year. Jeep Liberty SUV sales rose 50 percent and the Ford Explorer jumped 35 percent. Gas averaged $3.43 per gallon at the end of June, down 41 cents from the end of March.

Pickup truck sales also improved as home building perked up. Chrysler's Ram pickup sales rose 12 percent and sales of the Ford F-Series - which has long been the country's best-selling vehicle - rose 11 percent.

At Chrysler, sales of the tiny Fiat 500 and Chrysler 300 large sedan more than doubled from a year earlier, helping the company to a 20-percent gain for the month.

General Motors' sales rose 16 percent, with strong demand for the Chevy Malibu midsize sedan and Volt electric car.

Ford's overall sales rose 7 percent. The Escape small SUV posted its best month ever after a new version of the popular vehicle went on sale.

The sales were welcome news to investors, who have beaten down GM and Ford shares in recent days over losses in Europe. Ford's stock climbed 2 percent to close at $9.60, while GM's stock jumped 6 percent to $20.67.

Toyota's sales rose 60 percent for the month while Honda's climbed 49 percent, but that wasn't surprising. Last year, both companies had little inventory at U.S. dealerships because of the earthquake in Japan. Now, they're taking back sales that their rivals gained last year. The Chevrolet Cruze, for example, was the top-selling car in the country June 2011, but its sales dropped 24 percent last month. Sales of its Japanese rivals, the Honda Civic and Toyota Corolla, jumped more than 40 percent each.

Sales would have been slower if carmakers hadn't sold so many vehicles to government, commercial and daily rental fleets, says Jesse Toprak, vice president of market intelligence for the car buying site TrueCar.com. A little more than a third of all the cars GM sold went to fleets, up substantially from last year. Ford also sold a third of its vehicles to fleets, but that was about the same percentage as last year.

GM said that was just the way some sales were timed, and its fleet sales should fall this month.

Toprak thinks that even if sales soften a little, they're still on track to reach 14.4 million by the end of the year. That's better than last year's 12.8 million, and it's far better than the 30-year low of 10.4 million during the recession in 2009.

"This is a healthy and sustainable rate of recovery," he said.

Other automakers reporting Tuesday:

* Nissan's sales rose 28 percent. Sales of the new Versa mini car and Quest minivan more than doubled.

* Volkswagen sales rose 34 percent on strong demand for two redesigned cars: the Beetle and the Passat.

* Hyundai's sales rose 8 percent. Sales of the new Accent jumped 57 percent, while sales of the luxury Equus sedan rose 61 percent.

© 2015 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

More about

More about

More about

  • Discuss

Welcome to the discussion.

5 comments:

  • Jane123 posted at 6:13 pm on Thu, Sep 13, 2012.

    Jane123 Posts: 9

    wish gas didn't cost so much. Meeting with everyone to discuss how the government is planning to take over our lives.... things are only going to get worse. 997tt

    used cars |
    new cars

     
  • David_Hussey posted at 1:29 am on Wed, Jul 25, 2012.

    David_Hussey Posts: 3

    Nice post here. I am been searching for this article for long time thanks for sharing.

    Used Luxury limousine

     
  • max power posted at 9:21 am on Wed, Jul 4, 2012.

    max power Posts: 559

    The best part about the "Cash For Clunkers" program is that it made all those Obama bumper stickers go away!

     
  • NoName posted at 7:18 am on Wed, Jul 4, 2012.

    NoName Posts: 253

    Love getting up early, heck half the day is over.... this is clearly Obama's fault that it took so long. Going into town today in my new black chopper...wish gas didn't cost so much. Meeting with everyone to discuss how the government is planning to take over our lives.... things are only going to get worse. 997tt

     
  • 986crazy posted at 6:14 am on Wed, Jul 4, 2012.

    986crazy Posts: 394

    They naysayers must be sleeping in this morning. Someone is bound to blame President Obama for it not happening more quickly, or the black helicopter crowd will chime in with it's really not that good, it's a government conspiracy. How about this: The auto industry had one its best months in years and HOPEFULLY it's an indication that things are getting better. Yah, I'm gonna go with the latter. :)

     
default avatar
Welcome to the site! Login or Signup below.
|
Not you?||
Logout|My Dashboard

Stocks