GM, Ford hurt as sales to rental companies slow
(MoneyWatch) Lower sales to car rental companies cut July sales numbers for General Motors and Ford, but Chrysler sales rose by 13 percent over a year earlier.
GM sales were down by 6 percent over last July and Ford by 4 percent. GM said rental firm sales lagged last month because planned deliveries took place earlier this year than last year.
Both companies cited bright spots among their newer models. The recently-introduced Chevrolet Sonic subcompact continued to lead its segment, and GM sales of subcompact and compact cars rose 41 percent over a year earlier. On the other end of the size spectrum, full-size pickups sales remained about even with a year ago.
Ford cited a slight increase in retail, non-fleet sales of 2 percent and said the Ford Fusion had its best-ever July sales. The Ford Explorer SUV posted the most July sales since 2006.
In contrast, Toyota reported a 26 percent gain over last July. And Volkswagen also reported a very strong July -- up 27 percent over a year ago paced by its redesigned 2012 Passat.
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Chrysler's strong performance -- its best July since 2007 -- was driven by big increases in a variety of models. The Chrysler 300 sedan was up 41 percent, the Jeep Grand Cherokee up 22 percent and the Dodge Journey 69 percent.
"July was another solid month for Chrysler Group as we again demonstrated our disciplined and methodical approach to growing sales and profits," said Reid Bigland, head of U.S. sales.
In results reported yesterday, Chrysler Group net income for the second quarter was $436 million -- a 141 percent improvement over a year earlier. Revenue for the quarter was $16.8 million, up 23 percent and reflecting a 22 percent increase in the shipment of its vehicles.
With full July results reported, they show a continuing loss of market share for General Motors and Ford and gains by Toyota and Honda. The Chrysler sales translate to a 10.9 percent share, about even with a year ago. GM's market share should be 17.4 percent and Ford's 15.0 percent -- off three points for GM and two for Ford.Meanwhile, Toyota's share was 14.3 percent, up 2 percentage points pushed by strong sales for its redesigned 2012 Camry. Honda's sharewas at 10.1 percent -- a three point gain. Honda and Toyota were crippled by low inventory in July 2011 in the aftermath of the Japanese earthquake and tsunami.
A big driver of increasing auto sales is the age of U.S. cars according to Alec Gutierrez, senior market analyst at Kelley Blue Book. The average vehicle on the road is 11 years old. "Today's rebound is driven by pent-up demand from consumers who delayed their purchase during the downturn," says Gutierrez. "In our survey, 30 percent of consumers said the primary reason they are shopping for a new vehicle is because their existing vehicle's mileage is too high."
