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Tags: cars | auto sales | Ford | GM

Auto Sales Fall Short of Estimates as Toyota Passes Ford

Friday, 01 August 2014 01:43 PM EDT

Ford Motor and Toyota Motor posted stronger-than-expected growth in U.S. auto sales in July but most manufacturers on Friday reported gains below expectations as several months of strong demand pushed optimism too high.

Ford's sales were up 10 percent at 212,236, with Toyota's up 12 percent at 215,802 due to strong demand for their SUVs as well as offering larger discounts.

Industry sales were up 9 percent from last year to 1,433,016 vehicles, but that still fell short of the 11 percent gain analysts polled by Reuters had expected.

Editor’s Note: New Warning - Stocks on Verge of Major Collapse

"Given the strength we saw over the last several months, the industry (growth) came back down at a little bit of a quicker pace than perhaps we had originally anticipated," said Alec Gutierrez, analyst with industry research firm Kelley Blue Book. "I wouldn't say the industry missed the mark too egregiously."

Toyota was the No. 2 seller in July, edging past Ford, which had held that spot for the first half of this year and for 2013 overall. General Motors remained in top place.

Incentives played a strong role in July sales.

Honda Motor was the only one of the top car companies to cut incentives from June to July, research firm J.D. Power said. Honda's July sales tumbled 8 percent to 135,908.

Average industry discounts last month rose slightly to just over $3,000 per vehicle, with Ford incentives averaging close to $3,919. Industry incentives were the highest since 2010, said Larry Dominique, president of research firm ALG.

GM, Nissan Motor, Chrysler Group and the Hyundai-Kia Group all reported higher July sales that nonetheless failed to meet analysts' expectations. The sales were Hyundai's best for July ever, while GM, Ford and Chrysler saw their strongest results for the month since before the 2008 recession.

GM said July sales were up 9 percent at 256,160. Also reporting increases were Chrysler, up 20 percent at 167,667; Nissan, up 11 percent at 121,452; and Hyundai-Kia, up 4 percent at 119,320.

The Volkswagen Group, which includes Audi and Porsche, said sales fell 6 percent to 49,469.

Morgan Stanley analyst Adam Jonas said growth slowed further than expected as the annualized sales rate in the month fell to 16.48 million vehicles according to research firm Autodata, from 17 million in June. Economists polled by Thomson Reuters had expected the annualized rate in July to ease slightly to 16.7 million.

With generous credit terms drawing buyers to more expensive vehicles, transaction prices in July remained firm, averaging $32,556 per vehicle, KBB said.

Ford said average prices on its full-size F-Series pickups topped $40,000, while GM's Chevrolet Silverado and GMC Sierra's average prices were close to $39,000.

Sales growth of full-size pickup trucks, a bellwether for the U.S. economy, slowed in July.

Sales of Ford's best-selling F-Series rose 5 percent to 63,240 vehicles. GM's full-size Silverado had flat sales at 42,097, while the Sierra was up 5 percent to 17,488. Chrysler's Ram pickup climbed 14 percent to 35,621.

In the luxury segment, Toyota's Lexus overtook Mercedes and BMW for the sales crown in July. Lexus sold 27,333 vehicles to 27,192 for Mercedes and 26,409 for BMW. It was the first time Lexus outsold its German rivals since August 2013, KBB said.

Gains in U.S. auto sales have been stronger than the overall economy since the recession. Still, the monthly figures provide an early glimpse into consumer spending.

Auto sales dropped to a low of 10.4 million vehicles in 2009 and have risen steadily since, in part because of easier credit and loans of up to 84 months. They reached 15.6 million last year.

Editor’s Note: New Warning - Stocks on Verge of Major Collapse

© 2023 Thomson/Reuters. All rights reserved.

U.S. auto sales growth slowed slightly in July despite hefty discounts, with most manufacturers reporting gains below expectations.
cars, auto sales, Ford, GM
Friday, 01 August 2014 01:43 PM
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