Car Sales Strong In July
July turned out to be a better month than expected at the nation's car dealerships.
Sales were up about 5 per cent over a July of 2009 that was helped by the start of the "Cash for Clunkers" program. Toyota, which got a big boost from the program, saw its sales off 3.2 per cent this year.
For the domestics, it was a different story. GM sales were up 5.4 per cent, there was a 3.1 per cent rise at Ford and 5 per cent at Chrysler.
Particularly noteworty, though, was the trend from June to July, particularly in terms of retail sales, those sales made to traditional customers at dealerships. Both G.M. and Ford saw double digit jumps.
"This month, particularly near the end of the month, we were getting reports of strong dealership traffic in most areas of the U.S.," says Don Johnson, GM's Sales Operations Vice President. "Still some ups and downs in some areas, but the trend is definitely positive."
GM saw sales of its core brands up around 25 per cent.
Month to month sales rose about ten per cent at the retail level, about two per cent overall. Ford seeing the same month-to-month trend, with its overall sales flat, but retail sales jumping 16 per cent.
"The consumer is carrying than they did in the first half of the year," says Ford sales analysis manager George Pipis. "That's a positive. So we'll just take that for the month of July and see what happens in August."
Pipas wasn't willing to say that the upward sales rate would continue.
"The cautionary note is that it's just one month. We'd like to see several months of higher consumer demand in a row during the second half of the year before we declare that we've got a turning point."
Analysts are also not ready to call July a turning point. There are also seasonal factors to take into account, including a perception that incentives are better in July.
"Even though the deals might not have been as good as they were in previous years, there were some deals out there," says Jeff Schuster, J.D. Power's director of global forecasting. "I think consumers responded to the time of year, as well as some of the other good signals that are out there."
Schuster says the only trend is volitility.
"If we look at where we've come through the first seven months of the year, we've had a lot of ups and downs. I think that's here to stay."
Many analysts had been expecting a month to month sales increase, but were expecting sales to be down from last year, because "Cash for Clunkers" boosted sales in July of 2009.
"Cash for Clunkers came in near the end of July last year," says GM's Johnson. "But, given the modest recovery of the market, but still continued strength, it was nice to see that July came in stronger than last year. "
Volkswagen sale are up 16 per cent from last July. Hyundai sales up 19 per cent. Kia sales up 21 per cent. Nissan saw its sales up 14.6 per cent. Honda sales were off slightly from last year, but up from June.
Both Johnson and Pipas expecting an annual sales rate of around 11.5 million units, which would be up slightly from last year. J.D. Power's Jeff Schuster says that's a pretty good showing.
"All in all, we're seeing numbers that are up. That's a good sign for the industry."
