News Column

Chrysler July Sales Up; Ford and GM Slip

Aug. 2, 2012

Brent Snavely

Chrysler headquarters

Sales of cars and trucks started off slow in July but picked up as the month continued as with U.S. car buyers mostly unaffected by a slowing U.S. economy, auto executives said Wednesday.

Automakers sold a total of 1.15 million vehicles in July, or 8.9% more than the same month last year. That works out to a seasonally adjusted annual rate of 14.09 million, a pace that meets analyst expectations for the month and is viewed as strong considering the nation's still weak economy.

"We are well ahead of the 2011 annuals sales," said Jessica Caldwell, director of pricing and industry analysis at Edmunds.com. "Good annual growth year-over-year is really where we want to be considering where sales have been."

Chrysler reported a 13% increase in July sales, while U.S. sales of Ford and General Motors fell by 3.8% and 6.4%, respectively.

Meanwhile, sales increased 45.3% for Honda, 27% for Volkswagen, 26.1% for Toyota, 16.2% for Nissan and 4.1% for Hyundai.

Both Ford and GM said their sales fell mostly because of a drop in fleet sales and said pace retail sales remained steady.

"We saw the traditional build up of sales as the month progressed," said Ken Czubay, Ford's vice president, U.S. Marketing, Sales and Service.

Chrysler recorded its 28th consecutive month of year-over-year sales gains. The Auburn Hills automaker said it sold 93,142 cars and trucks for the month, which had two fewer selling days than July 2011.

Ford said its sales declined in July because fleet sales declined 16%.

Sales declined 3.5% for the Ford brand while sales dropped 10.7% for the Lincoln brand. Ford said sales of the Fusion midsize sedan increased 21% and sales of its Explorer SUV increased 14.3%.

GM said its sales fell because pulled back on sales to rental car companies while fleet sales to commercial and government buyers increased.

"The majority of the decline was due to the timing of rental fleet sales," said Kurt McNeil, GM's vice president for U.S. sales operations. "Essentially, we delivered more rental units earlier in 2012, than we did in 2011."

General Motors said its sales fell because it pulled back on sales to rental companies, corporations and government fleets. But even after backing out fleet sales direct sales by dealers to consumers dropped by 3%. Of its four brands, only Cadillac posted a sales increase -- 21% -- largely on the strength of its new XTS sedan and the SRX crossover.

Volkswagen said its July sales increased 27% in July as sales of its Beetle compact car and its Passat midsize sedan led the way.

Nissan said its total U.S. sales increased 16.2% in July. Sales of the Nissan brand increased 12.3% in July while sales of Infiniti increased 56.8%.

Despite a still weak economy, Ford sales analyst Erich Merkle said the pace of July sales slowed mostly because the industry's fleet sales declined.

"We think that fleet was an anomaly, it was a little short here in the month of July, but we think that the retail market is still holding up fairly well," Merkle said.

U.S. consumers continued buying new cars and trucks at a brisk pace in July, but there are growing concerns that industry sales will slow down during the second half of the year.

But for now, the industry is still enjoying a slow, but steady sales rebound because people who held onto cars during the recession are finally ready to buy new models. Buying a car also has become easier because banks that froze lending in 2008 and 2009 are increasingly willing to make loans to people with slightly riskier credit records.

In July, Chrysler said sales increased 35% for its Chrysler brand, 6% for Dodge, 22% for Fiat, 7% for Jeep and 15% for Ram.

"July was another solid month for Chrysler Group as we again demonstrated our disciplined and methodical approach to growing sales and profits," Reid Bigland, president and CEO of the Dodge Brand and head of U.S. sales said in a statement.

Bigland said Chrysler's performance was driven in part by two models that set sales records for the month of July: the Chrysler 200 mid-size sedan and the Dodge Journey full-size crossover. Sales of the 200 increased 43% and sales of the Journey increased 69%.

The company said it sold 772 Dodge Darts in July. The Dart, an all new compact car, began arriving in dealerships in late June.



Source: (c)2012 the Detroit Free Press Distributed by MCT Information Services


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