Auto sales show August rebound
The largest automakers saw double-digit sales gains for the month, but in some cases that still wasn't enough for Wall Street.
After months of slow sales, car dealerships are finally seeing customers return. Automakers reported strong U.S. sales for August Thursday, with many showing double-digit growth.
The numbers signaled a nice rebound from July, when overall industry U.S. sales ticked up less than 1% from a year earlier. The last several months have been slow, in fact, and hopes are high that August may signal a change in momentum heading into the fall.
One analyst says in the following video that Ford and GM shares can double in the next year.
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General Motors (GM) sold 218,479 vehicles, an 18% gain from a year ago. Retail sales to consumers were the bright spot with a 22% increase, while fleet sales rose only 8%.
Still, the news wasn't good enough for Wall Street. Analysts were expecting a gain of at least 19%, and GM shares fell 4% Thursday to close at $23.03.
"GM has been on a bit of a roll," the chief executive of auto researcher Edmunds.com told Bloomberg. "The inventory shortage at Toyota and Honda has created an opportunity for everybody and they’re not letting it slip by."
The Chevrolet Cruze continued to be one of the automaker's hottest cars, topping 20,000 in sales for the fifth month in a row. Passenger cars and trucks saw an 18% sales spike, while crossover sales rose 17%.
The seasonally adjusted annual rate for light vehicles came in at 12.1 million units for August -- about what analysts expected -- according to industry tracking firm Autodata. That's up from 11.5 million in August of 2010, but down from 12.2 million in July of this year. Total industry unit deliveries rose 7.5% from August of 2010 and 1.2% from July of this year.
Hurricane Irene put a slight dent in August sales, as many dealerships along the East Coast closed for several days. Shoppers were distracted before and after the storm hit, and so some of August's sales may be pushed into September. Edmunds.com estimated that Irene hurt August auto sales by at least 10,000.
Ford (F) sales rose 11% for the month to 175,220, as the automaker ran into supply problems with its popular Focus compact. Analysts had been expecting a 14% increase.
A shortage of inventory caused Focus sales to drop by 9% to just over 14,000. And Ford's top-selling vehicle, the F-Series pickup, only gained 2.4% in the month to 48,795. Ford shares fell more than 2% to close at $10.85.
Unlike its two Detroit rivals, Chrysler was able to beat analyst expectations with a 30.6% increase in August sales to 130,119. Wall Street had only been looking for 16% to 21.2%.
Chrysler, majority owned by Italy's Fiat (FIATY), may have gained from a promotion during the month that offered no payments for 90 days. The Jeep division alone saw a 58% increase, maintaining a sales surge seen earlier this year.
With these sales, it's hard to believe that U.S. consumer confidence dropped to a two-year low in August. "Consumers are being cautious, and appropriately so, but they are not retrenching," GM sales executive Don Johnson said in a conference call Thursday. "All indications to us are that the industry is going to slowly grow for the rest of this year."
Toyota (TM) is still feeling the impact of the Japanese earthquake, posting a 12.7% drop in U.S. sales to 129,483. Analysts had expected an 11% slide. It was the third time in four months that Chrysler outsold Toyota in the U.S., CNBC reported. But investors didn't seem to mind, and Toyota's ADR share price closed down slightly to $71.17.
Nissan (NSANY) sales rose 19% to 91,541 units, and the company estimated that Hurricane Irene chopped 3,000 from that total. "I'm very encouraged by August," said Nissan executive Al Castignetti," according to The Wall Street Journal. "Had we not had Irene, it would have been a fantastic month. I think September will be very strong."
Honda (HMC) sales fell 27% in August to 82,321, and the company said it's still dealing with reduced supplies after the March earthquake in Japan. The Accord was the top-selling model, at 18,439 units, but that was still a 21% drop from a year ago. The company's ADR shares closed up 1% to $32.82.
Hyundai said it sold 58,505 vehicles, a 9% increase.
Volkswagen (VLKAY) sales rose 10.4% to 25,232. August had plenty of challenges, with Hurricane Irene and sliding consumer confidence, said Volkswagen of America chief executive Jonathan Browning. But the company has now seen seven straight months of double-digit growth in the U.S.
I really hate these articles that refer to what wall street thinks should have happened. Really, GM did 18% but WS expected 19% increase so "the market" downgraded their stock! What a bunch of crap. These financial types talk about "the market" as a living breathing thing. There are stories every day of some company having records profits or some company laying off employees then the financial media have to package that up and tell us why the market went up or down that day. Nobody knows, just look at your investment statements, it's a crap shoot.
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