Automakers Report Better-Than-Expected August Sales
Published: Tuesday, 4 Sep 2012
By: Reuters with AP
U.S. auto sales continued to show a slow but steady recovery in August, as Toyota, Ford, Chrysler and General Motors reported sales gains that outstripped analyst expectations.
Toyota Motor's [TM 78.49 -1.13 (-1.42%) ] August sales jumped 45.6 percent from a year ago, in the wake of Japan's catastrophic tsunami on March 11, 2011. Edmunds had expected sales an increase of 41.8 percent.
GM's [GM 21.27 -0.08 (-0.37%) ] sales were up 10.1 percent from a year ago, above Edmunds' estimate of 6.4 percent.
Ford Motor's [F 9.411 0.071 (+0.76%) ] rose 13 percent, to 197,249 vehicles, and Chrysler had its 29th-consecutive month of year-on-year sales gains and a 14 percent rise in August.
Chrysler sales were 148,472 vehicles, which the company said showed its best performance for August since 2007.
The fact that consumers are replacing older cars and trucks and helped U.S. auto sales in August gain at a faster rate than the overall economy, said Carsten Krebs, head of communications for Volkswagen Group of America.
The U.S. economy grew at a rate of 1.7 percent in the second quarter.
Volkswagen showed its best August U.S. sales performance since 1973, Krebs said, rising 62.5 percent to 41,011 vehicles.
Rising gas prices were a factor in consumer choice of vehicles in August, said Ken Czubay, Ford vice president of U.S. marketing.
"As fuel prices rose again during August, we saw growing numbers of people gravitate toward our fuel-efficient vehicles," said Czubay.
Ford reported record sales for the Escape crossover and Fusion sedan, and said F-Series pickup had its best sales month all year. Ford brand sales were up 13.1 percent, while Lincoln brand sales rose 1.7 percent.
U.S. auto industry sales should be 14.6 million new vehicles on a seasonally adjusted annualized rate, including medium and heavy-duty trucks, Chrysler said.
Taking out the medium and heavy trucks, that would be about 14.3 million light cars and trucks, compared with 14.1 million projected in July.
Economists polled by Thomson Reuters last week expected an August annualized sales rate of 14.2 million light vehicles, compared with 12.1 million vehicles on an annualized rate last August.
Analysts use the light vehicles sales figure as a key measure of the industry's health.
Chrysler is managed by and majority owned by Fiat SpA .
Industry analysts say U.S. auto sales are likely to keep the economy going even as it struggles to grow. The economy expanded at a tepid 1.7 percent annual rate from April through June. On Friday, Chairman Ben Bernanke made clear that the Federal Reserve (learn more) will do more to boost the economy because of high unemployment (learn more) and a recovery that remains "far from satisfactory."
Pent-up demand is expected to drive the strong sales, said Jeff Schuster, senior vice president of forecasting for LMC Automotive, an industry consulting firm. The average car and truck in the U.S. is nearly 11 years old, and it's getting to the point where people have to replace them because they're worn out.
Customers likely found good deals on 2012 models last month, especially for leases and pickup trucks. Chrysler is offering $4,289 in discounts on the Ram 1500, Edmunds said. Also, Honda Motor [HMC 31.3874 -0.5026 (-1.58%) ] raised its incentives 27 percent in August from July to an average of $1,666 per vehicle.
Buyers also were drawn out by exciting new models such as the midsize Nissan Altima and the Dodge Dart compact, Schuster said. Chrysler sold more than 3,000 Darts in its first full month on the market. The Dart is the company's first competitive compact car in more than a decade.
Low interest rates also were pulling people in. A 48-month new-car loan averaged 2.98 percent last week, according to Bankrate.com. And automakers were offering no-interest loans on some models.
Sales started the year strong, backed off a little in May, but came back during the summer. Schuster expects to end the year at 14.3 million, more than 1.5 million above last year. Sales hit a recent high of 17 million in 2005. The bottomed at a 30-year low of 10.4 million during the recession (learn more) in 2009.
