U.S. buyers snapped up new cars and trucks in June at a pace not seen since before the recession.
Continuing demand for big pickups helped boost sales for Detroit's automakers. Ford said Tuesday that its sales rose 14 per cent while Chrysler's gained eight per cent and General Motors' rose 6.5 per cent.
Japanese automakers reported solid gains as well. Nissan's sales jumped 13 per cent while Toyota's and Honda's each rose 10 per cent. South Korea's Hyundai reported a record June, with sales up two per cent.
Only Volkswagen's sales dropped three per cent, the third straight monthly decline for the German car company as some products like the Jetta start to age.
Growth likely to continue
Analysts say they don't see much that could slow the sales momentum of the first six months. The factors that juiced sales — low interest rates, wider credit availability, rising home construction and hot new vehicles — are likely to remain in place. So far, hiccups in the stock market, higher taxes and fluctuating gas prices haven't dampened demand.
"I think the fundamentals for continued growth in the new vehicle sales industry are intact," Chrysler's U.S. sales chief, Reid Bigland, said last week.
Analysts estimate that U.S. auto sales rose six per cent to eight per cent in June compared with the same month last year. The auto pricing site TrueCar.com predicts that dealers sold cars and trucks at an annualized rate of 15.7 million last month, the best rate since December 2007.
Sales of pickups — which have been selling at a rate three times faster than the rest of the industry has — continued at a strong pace in June.
Ford sold just over 68,000 F-Series trucks, up 24 per cent from last June and its best June for trucks since 2005. GM said sales of the Chevrolet Silverado jumped 29 per cent to 43,259 while Chrysler Group sold nearly 30,000 full-size Ram pickups, up 24 per cent from last June.
Small businesses have been replacing their aging trucks as home construction has picked up.
Graduates helped bump small car sales
Young graduates may have contributed to a rise in small car sales, said Kelley Blue Book analyst Alec Gutierrez. Gas prices, which averaged $3.60 US a gallon (95 cents a litre) nationwide in June and were higher than a year ago, may have steered some buyers to more fuel-efficient models, he said.
Sales of Ford's recently updated Fiesta subcompact more than doubled to 9,363 while sales of the subcompact Honda Fit were up 10 per cent. Sales of the Hyundai Elantra small car jumped 26 per cent to more than 22,000.
Consumer confidence hit a six-year high in June. And the Standard & Poor's 500 index had its best first half since 1998, up 12.6 per cent, although there was some volatility late last month.
At the same time, auto loan rates remained near historic lows in June. The rate on a four-year new-car loan is averaging 2.7 per cent, according to Bankrate.com.
Ford said two of its best sellers, the Fusion sedan and Escape SUV, were flat compared with last year, when the company was discounting older models to make way for the updated ones that are now on sale. Ford's Lincoln luxury brand was down one per cent.
Jeep sales flat
Chrysler, majority-owned by Fiat SpA of Italy, also had some weak spots. Jeep sales were flat as the company halted production of the Liberty to get ready for the launch of the new Jeep Cherokee in August.
Jeep may also have been squeezed by Chrysler's public flap with the government last month over the safety of some older-model Jeeps. And sales for the Chrysler and Fiat brands both rose one per cent.
Honda reported strong sales of family haulers for the summer road trip season. Sales of the Odyssey minivan — which will be replaced by an updated model this month — jumped 26 per cent, while the CR-V small SUV was up 14 per cent.