Sales rise 5.3% on hardy crossover, truck volume

U.S. light-vehicles sales -- fueled by healthy truck demand and gains at most major automakers -- rose 5.3 percent in July, helping the industry begin the second half of 2015 on a strong note.

Light trucks set the pace, rising 13 percent last month, while car demand slipped 2.7 percent. 

Ford Motor Co., Nissan Motor Co., Honda Motor Co., General Motors, Fiat Chrysler and Hyundai-Kia all had gains between 5 percent and 8 percent while Subaru scored its sixth double-digit advance of the year.

The seasonally adjusted annual sales rate jumped to 17.55 million -- the second-highest tally in a decade. The SAAR has now topped 17 million in four out of seven months this year.

Summer deals, pent-up demand, falling gasoline prices, low interest rates and steady employment gains continue to outweigh sluggish consumer spending and weak wage growth to spur higher new-vehicle demand.

“Improving economic fundamentals should support continued job growth and a good environment for vehicle buying,” said Yong Yang, Ford’s senior economist for the Americas. “Industry performance should stay strong throughout 2015.”

With a 5 percent increase, Ford more than doubled the pace of its first-half advance. Honda and GM had their biggest jumps since January. Nissan set July records for the company and its namesake brand. FCA US ended its streak of monthly sales gains to 64.

“The second half of 2015 is off to a great start, with industry sales above expectations,” said Kurt McNeil, GM’s U.S. vice president of sales operations.

Industry volume was forecast by analysts to climb about 2.8 percent.

Automaker by automaker

Nissan Group’s U.S. deliveries rose 7.8 percent to 130,872 on strong sales of SUVs and crossovers. The Nissan division was up 6.7 percent. The Murano and Altima also set sales records for the month, Nissan said.

At Infiniti, sales rose 22 percent to 10,433.

Honda Motor Co. posted an increase of 7.7 percent on sales of 146,324 Honda and Acura vehicles.

Hyundai and Kia both set monthly sales records. Hyundai sales rose 6 percent to 71,013 units during a strong month for the Santa Fe crossover, while Kia sales rose 7.7 percent to a record 56,311 units.

Kia’s biggest highlight was the Sedona, which generated 3,672 sales in July, nearly a fourfold increase. Buyers paid an average of $34,435 for the minivan, up more than $5,000 from last summer, according to car-pricing service Kelley Blue Book.

Subaru continued to outpace the market, with U.S. sales rising 11 percent to 50,517 in July -- a monthly record. The brand’s U.S. deliveries have now advanced 44 consecutive months.

Pickups boost Ford

Ford Motor was boosted by a 21 percent gain at Lincoln, while Ford Division was up 4.4 percent. F-series pickups advanced 4.8 percent -- their first year-over-year increase since January -- and delivered “record average transaction pricing,” Ford said.

General Motors rode increases at Chevrolet and Buick to a 6.4 percent overall jump. Winning divisions were Chevrolet (up 7.8 percent), Buick (18 percent) and GMC (1.4 percent), while Cadillac fell 7.1 percent. The automaker said its retail sales were up 14 percent while fleet sales were down as it continued with efforts to reduce deliveries to rental companies.

Fiat Chrysler’s U.S. sales, aided by another strong showing by the Jeep brand, rose 6.2 percent to 178,027 vehicles.

Jeep deliveries jumped 23 percent to 73,216, a July record. Sales rose 1.2 percent at Ram, while volume advanced 10 at the Chrysler brand. Sales slipped 13 percent at Dodge and 15 percent at Fiat.

FCA’s overall light-truck sales and overall car sales both rose 6 percent last month.

At the Volkswagen Group, sales rose 2.4 percent at VW and 21 percent at Audi.

Toyota Motor Corp. edged up 0.6 percent to 217,181 vehicles last month, with weaker Toyota, Scion and Lexus car volume offset by stronger truck demand. Toyota division volume slipped 0.1 percent to 183,500 and Lexus deliveries jumped 9.1 percent.

Lexus also topped Mercedes-Benz, excluding Sprinter, and BMW in U.S. luxury-brand sales last month.

“July auto sales showed no signs of slowdown for the industry,” said Bill Fay, Toyota Division group vice president and general manager.

Light trucks rule

Light trucks and crossovers continue to dominate vehicle mix across the industry as gasoline prices remain low and a favorable credit environment make it easier for consumers to purchase larger vehicles.

“This feels like more of a real 17-million-plus month and not one based on calendar quirks,” Mark Wakefield, AlixPartners LLP’s auto analyst, said on the better-than-expected July auto sales. “There’s nothing special about July except that there’s really nothing bad happening. So consumers aren’t worried and respond to the positive factors like jobs and economic growth and low gas prices.”

July marked the 23rd consecutive month that light trucks outsold cars, Edmunds said today, with compact trucks and crossovers the two fastest-selling product segments. Most SUV segments are selling faster than cars, though many large SUVs struggled in July and generated lower volumes.

Overall, the average days to turn for a light vehicle in July was 62 days, the lowest average for a single month since November 2011, Edmunds said.

For the year now, U.S. light-truck sales have advanced 11 percent and car deliveries have slipped 1.8 percent.

The shift to light trucks continues to drive up transaction prices, as well.

“The industry continues to outperform prior-year levels with respect to retail sales and transaction prices,” said John Humphrey, senior vice president of the global automotive practice at J.D. Power, before today’s figures were released. “The average new-vehicle retail transaction price so far in July is $29,673, on pace to achieve a new record for the month.”

TrueCar today estimated the average transaction price for a new light vehicle was $31,691 in July, unchanged from a year ago. Kelley Blue Book projected average transaction prices rose 3 percent to $33,453 last month compared to July 2014.

In some parts of the Midwest and South, the price of unleaded gasoline has dropped below $2 a gallon. AAA says most U.S. drivers paid the lowest price for a gallon of gasoline in July since 2009.

The drop in fuel prices have helped U.S. light-vehicle deliveries climb 4.5 percent through July.

Summer deals

Fueled by favorable financing terms, notably extended loans, higher leasing penetration, and steady job and economic growth, analysts say U.S. deliveries remain on pace to reach 17 million for all 2015. It would mark the sixth consecutive year that sales have increased since hitting bottom at 10.43 million in 2009.

“The industry has found its groove and consumers continue to respond and make purchases, replacing their aging or off-lease vehicles,” said Jeff Schuster, senior vice president of forecasting at LMC Automotive.

Many automakers continued or launched summer clearance deals or other promotions in July.

TrueCar estimates the average industry incentive fell 1.2 percent to $2,849 in July from a year earlier.

The biggest spenders on incentives, TrueCar estimates, last month were GM ($3,983); Fiat Chrysler ($3,413); Nissan ($3,168); Volkswagen Group ($3,138) Ford ($2,678); Hyundai ($2,546); Kia ($2,490); Toyota ($2,034) and Honda ($1,935).

Jesse Snyder, Nick Bunkley, Gabe Nelson and Dave Versical contributed to this report.