Auto sales on fire in June
Detroit's Big 3 blow away analysts' estimates as consumers respond to new models and low interest rates on car loans.
After hitting a speed bump in May, auto sales came roaring back last month, with General Motors (GM), Ford (F) and Chrysler all beating analyst expectations.
The strong sales pushed the seasonally adjusted annual rate to 14.08 million units in June, according to industry tracking firm Autodata. That beat the 13.8 million rate seen in May, which was also the rate analysts expected for June. And what a change from a year ago, when the rate was only 11.56 million units.
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Research site TrueCar.com said it expected about 1.24 million light vehicles to be sold in June, up 18% from a year earlier. One factor boosting sales is low interest rates on loans. The average interest rate on a 60-month car loan has fallen to 4.5%, according to Bankrate.com.
The average transaction price has fallen as well. Shoppers paid an average of $500 less for a new car compared with June of last year, according to Kelley Blue Book. The company is expecting sales of 14.2 million units this year, an 11% increase from 2011. The average age of vehicles on U.S. roads is close to 11 years, and many people will buy a replacement regardless of the economic climate.
"If a family in Iowa's only mode of transportation is on the fritz, they are going to buy a replacement vehicle, even if Spain's economy is on the brink of collapse," said Alec Gutierrez, senior market analyst at Kelley Blue Book, in a statement.
GM said its sales rose 16% to 248,750 vehicles, its highest sales since September 2008. Analysts were expecting only a 7.6% increase. "The combination of new products, available credit, lower fuel prices and modest economic growth was a stronger influence on consumer behavior than economic and political uncertainty," said Kurt McNeil, GM's vice president of U.S. sales operations, in a statement.
Passenger car sales rose 12% and truck sales rose 11%, while fleet deliveries soared 36%. GM investors were pleased with the numbers, sending the stock up more than 5% to close at $20.67.
Ford's June sales rose 7% to 207,759, beating the 194,030 expected by analysts at TrueCar. The new Ford Escape set an all-time monthly record at 28,500. Ford Escapes generally sat on dealer lots for less than five days, a stronger start than the new Explorer saw in 2010, the company said. The Fusion also continued to be one of the strongest sellers for the company.
Ford shares rose more than 2% to $9.60 on the news. Shares had been falling steadily all year from close to $13 in January.
Chrysler, which has seen stellar sales all year, said June sales rose 20% from the same period in 2011 to 144,811. Analysts with TrueCar were expecting Chrysler to sell just under 140,000 units. It was the highest June sales month since 2007, the automaker said.
Here's how other automakers fared in June:
Toyota Motor (TM)
Vehicles sold: 177,795
Change from a year earlier: a 60.3% gain
Of note: Even that strong performance couldn't impress analysts, who wanted to see a 66% gain.
Vehicles sold: 124,808
Change from a year earlier: a 48.8% gain
Of note: The super-hot CR-V set a sixth straight monthly record with 23,282 units sold in June.
Vehicles sold: 92,237
Change from a year earlier: a 28% gain
Of note: Sales of luxury Infiniti line rose 66% to 10,436.
Vehicles sold: 38,170
Change from a year earlier: 34.2% gain
Of note: Nearly 209,000 vehicles sold in the first half of the year, the best first half since 1973.
Despite all the negative posts I'm seeing here, I work for a General Motors supplier (Dana Driveshaft, and FoMoCo, among others) and over the past year or so we have seen a large up-tick in orders. We've added 100 jobs (double our earlier capacity) to our shop, and I'm happy to see that sales are strong. I've not made more money in any comparable time span than I have in the past 7 months or so, mostly due to working 7 days a week, but still......
Here's hoping (and working towards) stronger sales in the future, so my kids can eat!
Important note here! Volkswagen is enjoying it's best year here in sales since 1973. That should tell you something America. The last time Volkswagen was that hot a seller here we were having the first energy crisis which began in 1972. Be sure to take a good look at the types of vehicles that were selling. It is the end of the old model year and so dealers are hustling to get the 2012s off the lot and they are considered still new cars. Also, be sure to look at the cars with high gas mileage expectations, the cars are getting smaller while the gas mileage is supposedly increasing.
Enjoy the uptick while it last and remember the unemployment numbers,sale numbers and jobloss numbers have all been under reported or misreported.
We are still in a mess and there hasn't been a recovery.....wake up folks!
The Political finger pointing and blame game shuffle hasn't do anything!
Itsa buying spree before all the new 2013 taxes hit us and we can't afford anything
I'm in the automotive lending business, and my business in the best it has been since 2008. People are buying cars because the vehicles they currently own are old and need replacing. A lot of them are investing in used vehicle as opposed to new vehicle, but our new vehicle loans have increased dramatically. There are still a lot of people out there with good credit and money to put down.
Let's not forget, investment rates are down. As a result, a lot of people are pulling the money out of investment accounts and spending it. Many on vehicle. My Dealers have seen an increase in cash deals.
We have been lucky and are still making good money but even with that i have been putting off getting a new car. As things go, though, we really need to get a new one as our two cars have 230k and 125k on them. Hoping to make it to Dec when we will only owe 2k on the lower milage car (the other has been paid off for years). Will pay that off and the go str8 into another loan for a new one
You can only put off so long and with some faint light at the end of the economic tunnel, i am not surprized that some people are finally getting off the fence
PS. My only debt i carry is my mortgage and one car loan
It's probably held up by a thread and will only last until November after the elections no matter who wins it will fall and only get worst. Much like the Stock Market. Too much money is in the economy Inflation will hit hard. Too soon to be tootin' any horns on either side. IMHO
The feds and wall street and worldwide central banks are getting really desperate to sell off all their stocks at their over inflated prices. Hmm, the IMF said just this morning, GDP is tepid and we are headed for the fiscal cliff. Just last week , all the fed factory reports came out negative but this private report put out today shows factory orders positive. Really, who do they think they are fooling? Look around folks, do you see new cars on the road? Temp tags? Are your friends and neighbors working? Are they long term or short term unemployed? Have they taken early SS retirement (many have) and taking a smaller payout?
Forget these laughing hyenas' in the news media........they are actors and are reading a script that is written for them.
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