General Motors Co. (GM:US) and Ford Motor Co. (F:US) posted surprising U.S. sales declines, slowing industrywide growth in July, as Japanese automakers continued their recovery and Chrysler Group LLC extended its run of monthly gains.
GM deliveries fell 6.4 percent and Ford light-vehicle sales slipped 3.8 percent, according to statements yesterday. Chrysler, controlled by Italian automaker Fiat SpA (F), increased deliveries by 13 percent. Honda (7267) Motor Co., Toyota (7203) Motor Corp. and Nissan Motor Co. (7201) exceeded analysts’ estimated gains.
U.S. light-vehicle deliveries rose 8.9 percent in July to 1.15 million, according to researcher Autodata Corp. The gain compared with the 1.17 million average estimate of 11 analysts surveyed by Bloomberg. The industry bolstered the U.S. economy with first-half sales up 15 percent, setting a pace for more than 14 million annual sales and the best year since 2007.
“I’d characterize the market as reasonably healthy,” John Casesa, senior managing director at Guggenheim Partners LLC, said in a Bloomberg Radio interview. “That could change if the U.S. economy goes south.”
Chrysler, on the rebound since emerging from bankruptcy three years ago, has benefited from newer models such as the Chrysler 200 sedan, Jeep Grand Cherokee sport-utility vehicle and Fiat 500 small car. Sales increased to 126,089, the Auburn Hills, Michigan-based company said in a statement. The 13 percent rise compares with a 14 percent gain that was the average estimate of 10 analysts surveyed by Bloomberg.
GM and Ford missed 11 analysts’ average estimates for gains of 2.1 percent and 0.8 percent, respectively. Deliveries to fleet buyers, which include government agencies and rental-car companies, plunged 41 percent for GM and 16 percent for Ford from a year earlier, the companies said.
“GM and Ford both cut down on fleet sales, which we had anticipated,” Rebecca Lindland, an industry analyst for IHS Automotive, said yesterday in a Bloomberg Radio interview. “We sort of factored all those in and still saw some disappointing results from both companies.”
Honda, based in Tokyo, led major automakers with a 45 percent rise in July deliveries, followed by gains of 26 percent for Toyota and 16 percent for Nissan. The automakers beat eight analysts’ average estimates for increases of 41 percent by Honda, 25 percent by Toyota and 15 percent by Yokohama, Japan- based Nissan.
Honda and Toyota lost sales in the year-earlier period after the March 2011 earthquake and tsunami in their home country disrupted shipments of vehicles and parts into the second half of last year.
South Korea’s Hyundai Motor Co. (005380) and Kia Motors Corp. (000270) combined to sell 4.8 percent more vehicles in July than a year earlier, beating six analysts’ average estimate for a 0.9 percent increase. The Seoul-based automakers combined to increase deliveries by 14 percent this year through June, according to Autodata.
Light-vehicle sales in the U.S. climbed 14 percent to 8.43 million through July, Woodcliff Lake, New Jersey-based Autodata said in an e-mailed statement. The seasonally adjusted annualized rate was 14.1 million, matching the average estimate of 16 industry analysts surveyed by Bloomberg.
Autodata revised sales rates for earlier this year to reflect restated seasonal factors released yesterday by the Bureau of Economic Analysis. The adjustments reduced the volatility of the monthly results.
The industry is on pace for a third-straight year of at least 10 percent gains, the first such streak since 1973. Chrysler’s 30 percent first-half increase led full-line automakers.
“We all thought Chrysler’s objectives were impossible, but man, they’re doing it,” said Sid Deboer, chairman of Lithia Motors Inc. (LAD:US), the No. 9 new-vehicle retailer in the U.S. Chrysler accounts for almost one-third of the dealer group’s sales. “It’s just been a boon to us. It’s been a real run.”
The sales results further illustrate Chrysler’s recovery since it emerged from bankruptcy in June 2009 after a rescue by the U.S. government. The company’s results have buoyed Turin, Italy-based Fiat, which is struggling with the fifth-straight year of decline in the European car market.
Chief Executive Officer Sergio Marchionne plans to build on the company’s passenger-car sales gains with the Dodge Dart compact car, which began arriving at dealerships in the second quarter. Chrysler sold 772 Darts in July. Deliveries of the Chrysler 200 and 300 sedans each rose by more than 40 percent.
“We don’t see a slowdown in the second half of the year” in U.S. industry sales, Chrysler Chief Financial Officer Richard Palmer said on a July 31 conference call.
Chrysler is counting on new models in the second half such as the Dart and revamped Ram 1500 pickup to maintain its momentum in the U.S. The company ran a national promotion in July for all vehicles in its lineup that lets buyers defer monthly payments for the first 90 days after purchase.
GM estimated a sales rate of 13.8 million to 14 million for July, it said in an e-mailed statement. Chrysler estimated a 14 million sales rate for July in its statement. The company’s projection includes medium- and heavy-duty trucks, Ralph Kisiel, a spokesman, said in an e-mail. Excluding such vehicles usually lowers the rate by at least 200,000 units.
GM fell 0.3 percent to $19.66 yesterday in New York, while Ford slipped 2.2 percent to $9.04.
GM introduced an offer on July 10 for no-haggle pricing on 2012 Chevrolet cars and trucks plus a money-back guarantee on all new Chevys to clear out end-of-model-year vehicles. That may help move 2012 model year Silverado pickups off dealer lots.
The automaker said it entered July with more than five months’ supply of full-size pickups as the Detroit-based company stockpiled trucks to carry it through 29 weeks of downtime at its four North American plants. The factories are being renovated and retooled to make newly designed models next year. GM said yesterday that it carried 136 selling days’ supply of full-size pickups at the end of July.
GM’s Silverado deliveries fell 13 percent in July to 28,972, the company said. Sales of the GMC Sierra pickup dropped 12 percent to 11,105.
Deliveries of Ford’s F-Series pickups rose 0.4 percent to 49,314, according to the Dearborn, Michigan-based company’s statement. Sales of the Fiesta subcompact fell 23 percent to 4,059 and the Escape SUV dropped 12 percent to 21,572.
“We like the pent-up demand piece that we’re seeing with pickup trucks,” Erich Merkle, Ford’s U.S. sales analyst, said yesterday on a conference call. “We’re moving into what we would call pickup truck season as we move into the second half of the year.”
Slower growth in U.S. pickup sales in the first half helped Toyota pass GM in global deliveries. The Toyota City, Japan- based carmaker’s worldwide sales rose 34 percent in the first six months of the year to 4.97 million, leading GM by 300,000 and Volkswagen AG (VOW) by 520,000 deliveries. GM global sales rose 2.9 percent to 4.67 million during the first half while Volkswagen’s increased 8.9 percent to 4.45 million.
Volkswagen, which set a target of more than 500,000 vehicle sales in the U.S. this year, increased combined deliveries of its VW and Audi brands by 28 percent in July. The gain exceeded four analysts’ average estimate of 23 percent.
“We’re seeing the momentum continuing despite a pretty competitive environment and this gradual economic recovery we’re seeing across the country,” Jonathan Browning, CEO of Volkswagen’s U.S. sales unit, said yesterday on a conference call.
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