Auto sales speed up as economy stays in slow lane

Ford is likely to outpace competitors in June, after gaining more than a point of market share in the first 5 months of the year.

By TheStreet Staff Jun 28, 2013 1:49PM

thestreet logoRow of cars in car lot copyright fotog, Tetra images, Getty ImagesBy Ted Reed

 

It's not quite clear what the stock market is trying to tell us about the economy, but auto sales numbers continue to show gains --- particularly for Ford (F).

 

"The stock market told us we needed a little bit of a correction, but I don't think that has a lasting impact on the momentum the market has overall, or on the auto sector," said analyst Jeff Schuster of LMC Automotive. "Now the market is bouncing back a bit, which I think is a positive signal that it won't be something that drags down auto sales."

 

Kelley Blue Book estimated June light-vehicle sales will gain 6% and the seasonally adjusted annual sales rate will reach 15.5 million, the highest pace since the November SAAR also hit 15.5 million. 


Edmunds.com projected a 5.3% increase and a SAAR of 15.5 million. LMC Automotive said it expects a gain of 7.6% and a SAAR of 15.7 million. Jeffries said the gain should be about 9%, based on the midpoint of the SAAR Estimates.

 

Meanwhile, Ford said Thursday that its market share is growing at its competitors' expense. Through May, Ford's market share year to date has gained nearly a full percentage point to 16.2%. Ford said the gains are due largely to its success in the small utility vehicle segment, where the Ford Escape (TheStreet) reigns, and midsize sedan segments, where the Fusion is a strong competitor.

 

Additionally, sales of the F-150 pickup truck, the top-selling U.S. vehicle, were up 22% for the first five months. In May, F-150 sales topped 70,000 units for the first time since March 2007. In June, Jeffries analyst Peter Nesvold said, "Consumer confidence surged past May's five-year high as home prices and sales continued to rise, with pickup trucks flying off the lots."

 

"The small utility segment will capture a record 13% of the market in June, " fueled by recent redesigns of the Ford Escape, Honda CR-V and Toyota RAV4," said Kelley Blue Book analyst Alec Gutierrez, in a prepared statement.

 

"We've had a strong first half of the year with new-car sales up nearly 7% compared to the first half of last year," Gutierrez said. "The industry continues to benefit from modest improvements in housing, unemployment and consumer confidence."

 

"Edmunds.com analyst Jessica Caldwell said auto sales had strong momentum throughout the first half of 2013. "Within the last month we saw a slowing stock market and a stalled unemployment recovery, but the automotive market continues to shine through it all," Caldwell said, in a prepared statement.

 

For June, Kelley Blue Book estimated sales gains of 15% for Nissan (NSANY), 13% for Ford, 8% for Chrysler, 7% for Honda (HMC), 4% for Toyota (TM) and 1% for GM (GM) with a 4% loss for Hyundai. Volkswagen sales were flat.

 

Kelley Blue Book said that Nissan cut prices on seven models in May and that Hyundai "faces production capacity constraints and competition from newer product offerings from other manufacturers, especially in the mid-size car segment."

 

 

More from TheStreet.com

5Comments
Jun 28, 2013 2:40PM
avatar
Beauty Sells.  Reliability, safety, efficiency, beautiful style, and affordability are important for average folks.  It seems to me car companies tend to modernize their cars but take away the attractive style.  Look at the Prius, it's ugly to me.
Jun 28, 2013 3:10PM
avatar
Media ad: "Alive? Come on down... we've got to have something in our severe overstock to force you into. We know we screwed every former employee and their whole families and they were our loyalist customer base... and we resorted to Subprime lending last year when new sales tanked, but hey, you should own a car whether you can drive or not... PLEASE save our jobs, we only qualify as lipstick testers in the real world."
Jun 28, 2013 2:33PM
avatar

If Ford keeps up with 33 to 35% Fleet sales they certainly will gain market share but its not helping profits one bit and those sales will sink their vehicles values in the long term. 

 

GM has cut their Fleet business to around 20% while Ford and Crapsler have taken up a position of 33 to 40% each month for Fleet sales.

Jun 28, 2013 4:50PM
avatar
All the cars tend to look alike, except for the really expensive ones.  I'll stick to my old Subaru Outback which hasn't changed much since 2000 models, except very superficially--even if I have to replace the engine and transmission, it will cost a lot less than a new car--or even a used one.  If you don't think that's true, check the studies.  (I did one of the first in 1968).
Report
Please help us to maintain a healthy and vibrant community by reporting any illegal or inappropriate behavior. If you believe a message violates theCode of Conductplease use this form to notify the moderators. They will investigate your report and take appropriate action. If necessary, they report all illegal activity to the proper authorities.
Categories
100 character limit
Are you sure you want to delete this comment?

DATA PROVIDERS

Copyright © 2014 Microsoft. All rights reserved.

Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.

STOCK SCOUTER

StockScouter rates stocks from 1 to 10, with 10 being the best, using a system of advanced mathematics to determine a stock's expected risk and return. Ratings are displayed on a bell curve, meaning there will be fewer ratings of 1 and 10 and far more of 4 through 7.

129
129 rated 1
281
281 rated 2
444
444 rated 3
732
732 rated 4
629
629 rated 5
623
623 rated 6
610
610 rated 7
440
440 rated 8
303
303 rated 9
126
126 rated 10
12345678910

Top Picks

SYMBOLNAMERATING
BBBYBED BATH & BEYOND INC10
TWXTIME WARNER Inc10
COPCONOCOPHILLIPS9
HDHOME DEPOT Inc9
VZVERIZON COMMUNICATIONS9
More

VIDEO ON MSN MONEY

ABOUT

Top Stocks provides analysis about the most noteworthy stocks in the market each day, combining some of the best content from around the MSN Money site and the rest of the Web.

Contributors include professional investors and journalists affiliated with MSN Money.

Follow us on Twitter @topstocksmsn.