A mildly brighter economic picture gave car sales another lift in June, as the overall sales rate climbed near the 16-million mark.
Consumer interest rates began to climb in June, but with gas prices relatively stable and unemployment more or less locked in place, car sales continued their stride. Strong upticks in sales were recorded by GM, Toyota, Ford, Chrysler, and Nissan. Pickup trucks continued their sales resurgence, up in the double digits at the domestic brands, as housing starts continued to pick up pace over the summer.
Among the highlights of June's sales numbers: GM rose 6.5 percent, Toyota by 14 percent, while Ford and Nissan sales were up 13 percent. Chrysler sales rose by 8 percent.
The fire sales on last year's pickup trucks and the introduction of new models continued to fuel sales of full-size trucks, with the Ford F-150 holding its lead on the segment--but with the newest versions of the GMC Sierra and Chevy Silverado closing to within 10,000 units of the F-Series lineup. The Ram 1500 drove a 23-percent rise at its eponymous brand.And while compact cars saw their share increase, mid-size and compact crossovers were among the biggest gainers. Ford's Escape and Edge crossovers were sharply more popular in June, while GM continued to grow sales of its Chevy Equinox and GMC Terrain compact utes.
Affordable, but for how long?
Low-interest loans have been a big driver of car sales and their revival, from the depths of the 2008-2010 recession. Now that interest rates are starting to climb in tandem with car prices, there's little worry that sales will slump back to recession levels.
According to Kelley Blue Book, the average new vehicle sold in June for $31,663, up $370, or 1.2 percent, from the month prior and up 0.9 percent from the year before. Consumers are consuming the increases handily: “Consumer confidence continues to be a strong factor," says Alec Gutierrez, senior market analyst at KBB, "along with pent-up demand and for now, low interest rates, bringing shoppers into the showroom to purchase a new vehicle.”A major swing in interest rates could bring down sales--as could gas prices--but neither has yet materialized, adds KBB analyst Karl Brauer.
“The trickiest part of rising interest rates is that they've been so low for so long, relatively speaking. They have finally moved up, but are still at near-historic lows. And the upswing is so recent that we haven't yet seen the real impact," Brauer notes. "As with gas prices, if rates stabilize at this level for awhile there will likely be no permanent effect on buying behavior, though I would expect the immediate effect (say, for the next few weeks) to be an uptick in vehicle research and sales as a certain number of people will fear future increases and want to buy now. We'll have a clearer picture of this near-term effect in the next couple weeks.”
According to Bankrate.com, the national-average 48-month new-car loan is 2.57 percent.With automakers still reporting, these sales figures have been logged for the month of June:
General Motors: GM [NYSE:GM] sold 264,843 vehicles in June, a gain of 6.5 percent over the same period a year ago. Cadillac was up 14.9 percent, while Buick was off 4.1 percent; GMC sales rose 4.5 percent, and Chevrolet was up 7.4 percent. Equinox and Cruze had their best months ever, but both the Buick Regal and LaCrosse were off more than 40 percent, while Cadillac's CTS lost 52.1 percent as a new sedan looms for the fall.
Ford: Ford Motor Co. [NYSE: F] sold 235,643 vehicles in June, up 13 percent from the same period a year ago. Its F-Series trucks saw their best June since 2005, at 68,009 units, for a 24-percent rise over a year ago. The Escape moved 28,694 units, its best month ever. Lincoln's MKZ is finally up to operating temperature: with 3,180 sales, and 10,682 units sold in the first quarter, it's posted its best quarter ever. However, Lincoln sales overall were down a percent, to 7,469 units.
Toyota / Lexus / Scion: In a brief sales preview, Toyota reported 195,235 vehicles sold in June, an increase of 14 percent on an adjusted basis, or 9.8 percent on an unadjusted basis.
Chrysler: Chrysler says it sold 156,686 vehicles last month, up 8 percent for its best June since 2007. Ram led the pack with a 23-percent gain to 30,935 units, while Dodge sales were up 12 percent to 49,843 units; Jeep (44,609), Chrysler (27,249), and Fiat (4,050) sales grew by 1 percent or less. Dodge's Durango pulled out of its sales swoon, up 39 percent from the year-ago period; Chrysler sold 18 percent more Town & Country minivans. The Jeep Grand Cherokee saw its sales rise by 33 percent--but the Dodge Journey was off 13 percent, the Chrysler 300 off 39 percent, and the Fiat 500, off 12 percent.
Honda / Acura: Honda says it sold a total of 136,915 vehicles between its Acura and Honda brands in June, for a 9.7-percent increase over the year-ago period, on an unadjusted basis (up 13.9 percent on an adjusted basis). Honda-brand vehicles accounted for 123,150 units, up 12.5 percent, while Acura tallied 13,765 units, down 10.4 percent. The CR-V, Odyssey, and Accord were strong sellers, with the Accord outpacing the Nissan Altima and Ford Fusion on the month, with the Civic approaching it at 29,724 sales.
Nissan / Infiniti: Nissan says it sold 104,124 vehicles in June, for an increase of 12.9 percent. Of the total, some 95,010 vehicles were Nissan-brand. The Leaf electric car accounted for 2,225 units, its second best month ever, while the Altima was up 23 percent to 26,904 units, for a new June record. Infiniti sales of 9,114 units were off 12.7 percent from a year ago.