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. 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."


" 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

Jun 28, 2013 2:40PM
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
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

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
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).
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