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$AXL American Axle & Manufacturing. Strong #AUTO SALES update
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Auto Makers Report Strong U.S. Sales -- 3rd UpdateFont size: A | A | A
11:24 AM ET 8/3/15 | Dow Jones
By Mike Ramsey And Chelsey Dulaney

U.S. auto sales continued their strong pace in July as the appetite for trucks and sport-utility vehicles overcame the fading popularity of fuel-efficient cars.

The auto industry is on pace to break 17 million vehicle sales for the year, the strongest level in more than a decade, as continued low fuel prices, low interest rates and an old fleet of vehicles on the road have combined to power the market for new cars into a long expansion that began in 2009.

With the national average for fuel prices at $2.65 per gallon of regular gasoline, down nearly $1 from a year ago, consumers are snapping up pickup trucks and SUVs.

General Motors Co., the largest U.S. auto maker, posted a 6.4% sales increase and Ford Motor Co. rose 4.9% in the month. Fiat Chrysler Automobiles said sales rose 6.2%, Nissan Motor Co. jumped 7.8% and Honda Motor Co. said sales rose 7.7%. Toyota Motor Corp. said sales rose less 1% off of a strong July 2014.

The six largest auto makers, which account for about 70% of the market, had a sales increase of 5.3% to 1,167,647 for July, as other companies continue to report sales throughout the day.

Purchases of light trucks, which are generally more expensive than cars, drove up transaction prices 2.6% to a $33,453, according to car purchase researcher Kelley Blue Book.

The thirst for larger vehicles has been good to the auto industry. Auto makers, both foreign and domestic, are reporting very strong second-quarter profits, built largely on results from North America. Trucks and SUVs tend to produce higher profit margins than cars. Through six months of 2015, light trucks have made up more than 50% of new car sales and the percentage is rising. The market share of pickups rose to 12.3% of the industry, up a full percentage point compared with a year ago, while midsize cars fell to 13%, down a point, according to Ford.

Demand for fuel efficient vehicles is spiraling down. Ford said sales of its C-Max hybrid plunged 36% in July and its subcompact Fiesta fell 27%. Production at its Wayne, Mich.-assembly plant where the C-Max is built, stands at 79% of its capacity, according to Wards Auto, while many of Ford's other plants, which make SUVs and trucks, are running 24 hours a day.

At FCA, trucks and SUVs made up 79% of its sales. Nissan said sales of its Leaf electric car plunged 61% in July and the compact Versa also fell 36%. GM's plug-in hybrid Volt fell 35% in the month.

Through June 2015, the market share in the U.S. for hybrid electric cars, like the Toyota Prius and C-Max and electric vehicles, like the Leaf, was 2.8% of industry sales. That is down from 3.6% through the same period in 2014. Volumes of those vehicles fell 22% while the overall industry rose, according to researcher Edmunds.com.

Auto makers have been selling cars to rental car fleets to blunt the effects of the drop in demand by consumers and the intense competition in a segment loaded with good options.

For example, Ford's sales of its Fusion sedan rose 5% in July to 25,105, attributed by Ford to higher sales to fleet customers and lower retail sales at dealerships.

"We think it is a market share battle in the passenger-car market for us, " Ford's U.S. sales chief Mark LaNeve said. "But we're doing reasonably well. Our Asian competition has been very strong. They're looking to protect their volumes. We've seen increased incentive spending from them, as well as higher inventories."

Christina Rogers contributed to this article.

Write to Mike Ramsey at [e-mail] and Chelsey Dulaney at [e-mail]

> Dow Jones Newswires

August 03, 2015 11:24 ET (15:24 GMT)

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