June 2012 Car Sales: Fireworks Or Sparklers This July 4th?

July 3, 2012

 

Car sales in June were stronger at the major automakers in June, but the pre-July 4th fireworks could fizzle later this year.

Economic indicators are mixed, and analysts worry that June's solid numbers could weaken as unemployment and consumer confidence continue to weigh on the market.

For the month of June, automotive analysts at J.D. Power estimate the seasonally adjusted annual rate (SAAR) of retail new-vehicle sales at 11.9 million units, up nearly 300,000 units from the prior month. With fleet sales included, total vehicle sales are expected to reach a SAAR of 13.9 million units.

John Humphrey, senior vice president of global automotive operations at J.D. Power and Associates, says, "All indicators point toward an industry that continues to get healthy."

However, those numbers still reflect depressed demand after the 2008 financial crisis and recession, when the SAAR had held near 15 million units. The American car fleet is aging, which should be reflected in higher demand, but economic factors here and in Europe are overshadowing strong sales earlier this year, and casting a shadow on the second half of 2012.

In the U.S., unemployment for June is expected to remain level with May's 8.2 percent, and consumer-confidence numbers dropped in June for the fourth month in a row, even though home prices showed some signs of stabilizing in many markets, and gas prices remained relatively low. In Europe, the uncertain future of the Euro is impacting both GM and Ford; Ford expects to lose about $570 million in the second quarter on its European operations, while GM is contemplating yet another restructuring of its Opel unit.

Still, the upward trends in U.S. sales show promise. Jeff Schuster, senior vice president of forecasting at LMC Automotive, says that, "Despite a rising level of uncertainty with the economic recovery, consumers remain resilient in their willingness to purchase new vehicles."

LMC Automotive estimates the 2012 SAAR at 14.5 million units, a figure at the high end of the expectations of most automakers. Ford puts demand even higher, at 14.6 to 14.7 million units, with GM predicting between 14 and 14.5 million vehicle sales; Volkswagen estimates 13.9 million units for the 2012 calendar year.

General Motors: GM (NYSE: GM) says it sold 248,750 vehicles in the U.S. in June, for an increase of 16 percent on the year. It was GM's best month since September of 2008. Chevrolet was up 14.8 percent to 180,098 units; GMC rose to 37,677 vehicle sales, up 14.9 percent. In advance of 2013 ATS, on sale later this summer Cadillac sold 12,124 vehicles, up 11.6 percent. And Buick sales rose to 18,851 units, an increase of 26.8 percent. GM sold 12 percent more passenger cars in June than a year ago, while crossover sales rose 30 percent. GM says during 2012 and 2013, it will replace or redesign 70 percent of its nameplates.

Ford: Ford (NYSE: F) says it sold 207,759 vehicles in June, up 7 percent from a year ago. Ford division sales were up 7.2 percent to 200,215 units, while Lincoln sales rose 2.5 percent to 7,544 units. The Escape had its best month ever, with sales on a 28-percent rise; like Escape, the Fusion is selling at record levels in its final model year, at 136,849 units so far this year.

Honda / Acura: Has not yet reported June sales. In May, Honda reported sales were up 47. 6 percent.

Among its nameplates, Chrysler had some standouts. The Jeep Grand Cherokee posted its best June since 2005, with sales up 39 percent. The Chrysler 300 saw a 179-percent jump in sales in June. However, the well-received Dodge Durango was off 43 percent, and is off 9 percent on the year.

Nissan / Infiniti: Nissan sold 92,237 vehicles in June, up 28.2 percent on the year. The Nissan brand accounted for 81,801 units of the total, up 24.6 percent; Infiniti sold 10,436 vehicles, up 66.1 percent on the year.

Hyundai: As has become its custom, Hyundai has given an early glance at its June sales numbers via Twitter. CEO John Krafcik reports: "Here's to the 63,813 new Hyundai owners last month...Best June ever, +8% over last year...thx & welcome aboard! ^jfk"

Volkswagen: VW reported its best sales since June of 1973 with a 34.2-percent increase. The Passat sold more than 10,000 units for the fourth month in a row, while Jetta sales slumped 20 percent--perhaps related to strengthening Passat and Tiguan sales. Some 19.2 percent of all VW sales are TDI turbodiesels; 21 percent of all Passat sales are TDIs and the number could be higher, VW says, if it could source more.

Subaru: Subaru reports it sold 27,702 vehicles in June, for a 40-percent increase over June 2011.

Mazda: Mazda has not yet reported June sales; in May it posted an increase of 13.9 percent.

Mercedes-Benz: Has not yet reported June sales. In May, Mercedes said sales were up almost 23 percent on the year.

BMW / MINI: Has not yet reported June sales. In May, it reported a 7.1-percent increase, year over year.

Audi: Audi says it set an all-time sales record in June, its best month ever in 42 years on the U.S. market. it sold 12,664 vehicles, up 26 percent from June 2011. Volvo: Has not yet reported June sales. In May Volvo sales were off 15.1 percent.

Jaguar/Land Rover: Has not yet reported June sales. In May, Jaguar Land Rover sales were up 8 percent to 4,513 vehicles.

Porsche: Has not yet reported June sales. In May, Porsche sales rose by 1 percent to 2,852 units.

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(c) 2012, High Gear Media.

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