Overall, sales rose 9%, even though July 2012 had two fewer selling days than July 2011. Both Ford and GM attributed their sales declines primarily to seasonal slowdowns in fleet sales, although their retail sales also slowed, reflecting primarily a surge in sales by Japanese automakers, led by a 45% gain at Honda (HMC) and a 26% gain at Toyota (TM). Nissan sales rose 16%.
The seasonally adjusted annualized sales rate was 14,1 million. Projections of the rate rose during the day as more automakers reported sales.
Edmunds.com economist Lacey Plache said she viewed the July sales numbers as a positive economic indicator."Auto sales remain strong, on track for sales of 14.4 million for 2012, or nearly 13% growth over 2011," Plache said in an e-mail. "(That) gives hope that there is a floor to recent weakness in other economic indicators and that autos could be a strong contributor to continued economic growth. "The bottom line is that pent-up demand for autos is still strong and can be expected to continue, given the aging fleet and the current expansion of credit," Plache said. "While consumer uncertainty about economic conditions remains a risk, July's confidence index increased somewhat, again indicating a floor to what had been a trend of sagging confidence." Another factor in declines for Ford and GM were fewer truck sales. GM retail truck sales fell 12%. "Truck buyers are reacting to (poor economic news) of the last several months," said Kurt McNeil, GM vice president of U.S. sales operations, during the GM sales call. But the outlook for truck sales is positive, both because of seasonal trends and a pickup in housing starts and, next year, the introduction of a new Silverado. "We're expecting more robust truck sales for the industry and for GM," McNeil said. The Detroit Three sell proportionally more trucks than foreign automakers do. Overall, GM sales declined 6% as fleet sales fell 15% and retail sales fell 3%. Sales to rental customers fell 41% because planned deliveries occurred earlier in the year than they did in 2011. Fleet sales account for about a quarter of GM's business. At Ford, sales fell 4% as fleet sales fell 16% while retail sales gained 2%. Fleet accounted for 27% of Ford sales. Fleet sales to both government customers and rental car companies declined. F-Series sales were flat, but truck sales fell 9%, mainly due to the discontinuation of the Ford Ranger, which sold about 6,400 units in July 2011 but only about 400 in July 2012. "The federal government and state and local governments have had budget issues," said Ken Czubay, vice president for U.S. marketing, sales and service, on the Ford sales call. "We've seen the pullback in their purchases. In rental car, seasonality is involved in that." Added Ford analyst Erich Merkle: "We think fleet is a bit of anomaly here in July. The retail market is still holding up relatively well." >To follow the writer on Twitter, go to http://twitter.com/tedreednc. >To contact the writer of this article, click here: Ted Reed
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
24/7 market commentary from Jim Cramer and 20+ veteran Wall Street gurus. Get access to the latest trading ideas on stocks, options, and ETFs as well as a real-time forum to see the pros exchanging their investment ideas.
- Jim Cramer + 20 Wall Street pros
- Intraday commentary & news
- Real-time trading forum
- Actionable trade ideas
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV