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US auto sales increase 8.9 percent in July

By Jerry Hirsch, Los Angeles Times –

LOS ANGELES — Automakers sold cars at a steady pace in July, with consumers helping the industry overcome a dip in sales to rental car companies and other fleet customers.

The industry sold almost 1.2 million vehicles in the U.S. last month, up 8.9 percent from July of last year. That equated to an annual sales pace of a little more than 14 million and is in line with most analyst estimates for the month and the year.

“The market is stuck in second gear. It is not bad, but it is not phenomenal,” said Jesse Toprak, an analyst with auto pricing company TrueCar.

If there was a wrinkle, it came at General Motors Co. and Ford Motor Co., which were the only major automakers to see their sales dip compared with a year earlier. Much of their declines resulted from the timing of sales of cars to rental fleets and efforts to reduce their reliance on that business.

GM executives said they were taking a more “disciplined” approach in their sales to rental car companies, a move they believe will improve profits and support the resale value of their vehicles.

For example, sales of the company’s Chevrolet Cruze compact sedan fell 39 percent to about 15,000 in July. Almost none of those deliveries went to rental car companies. Last July, Chevrolet sold nearly 6,400 Cruzes to the rental industry.

Nonetheless, GM’s results highlighted the challenges the nation’s largest auto manufacturer faces in the coming months.

GM’s overall U.S. sales fell 6.4 percent to 201,237, according to Autodata Corp. Sales of its large trucks and sport utility vehicles — its most profitable products — fell at a steeper rate. GM’s market share also continues to erode. Its share of the U.S. market dipped to 17.4 percent in July, down almost 3 percentage points from 20.3 percent in the same month last year.

Ford sales fell 3.8 percent to 173,482 vehicles. It also attributed the dip to a decline in fleet sales, including its business with government agencies.

“As the federal and state and local governments have had budget issues we have seen the pullback in their purchases,” said Ken Czubay, Ford’s sales chief.

Any softness in the auto market resulting from fewer fleet sales is not a big worry at this point, said Peter Nesvold, a Jefferies & Co. analyst.

“If anything, the quality of these numbers are pretty good,” Nesvold said. “It generally is favorable when the mix moves from fleet to the retail part of the business.”

Chrysler Group was the only domestic automaker to gain ground last month, with sales rising 12.6 percent to 126,089.

The big Japanese automakers also had a good July as their U.S. sales rebounded from supply problems caused by the Japanese earthquake last year.

American Honda Motor Co. sales rose 45.3 percent to 116,944 vehicles, and it is experiencing its best year-to-date sales in four years, said John Mendel, American Honda executive vice president of sales.

Toyota Motor Corp. sales rose 26.1 percent to 164,898 vehicles. Nissan North America sales climbed 16.2 percent to 98,341 vehicles.

Other import brands also did well. Sales at Volkswagen, including the Audi brand, jumped 27.5 percent to 48,941. Hyundai Motor America sales rose 4.1 percent to 62,021.

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