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U.S. auto sales continued at a modest pace in July, but continued high unemployment and weak consumer confidence took their toll on GM and Ford.
Domestic sales at No. 1 U.S. automaker General Motors (GM) fell 6.4% vs. July 2011 to 201,237 vehicles. No. 2 Ford Motor (F) said sales fell 3.8% to 173,966. Both missed analyst forecasts.
High-volume, lower-margin fleet sales tumbled as expected. GM's dived 41% while Ford's sank 16%. But traditional retail sales also disappointed.
Chrysler's U.S. sales climbed 13%, topping at least some forecasts. But the Fiat-controlled automaker's gains are slowing from earlier this year as it rebounds from its bankruptcy and near-death three years ago.
U.S. automakers also face resurgent Asian makers rebounding from supply chain woes in the wake of Japan's earthquake and Thai floods.
Toyota's (TM) U.S. sales rose 26% to 164,898, just under targets by auto researcher Edmunds.com. Honda (HMC) climbed 45% to 116,944 units, also missing.
VW Still In Fast Lane
Meanwhile, Volkswagen (VW) U.S. sales rose 27.1% to 37,014 — its best July since 1973. Year-to-date VW sales are up 34.1%, helped by its new Tennessee plant.
The July sales data followed a spate of generally lackluster economic data, including Tuesday's Commerce Department report that Americans were saving more and spending less in June.
"What we're seeing is a consumer that's not spending money aggressively, and we need them to spend money aggressively," said Joel Naroff president of Naroff Economic Advisors.
Many major retailers will report July same-store sales data on Thursday morning.
Overall July U.S. sales appeared to run at about a 14 million vehicles seasonally adjusted annual rate, in line with estimates and July's pace. That's up from last year's SAAR of 12.8 million, but still well off the 16 million or so annually before the recession.
U.S. sales are increasingly important as Europe falls deeper into recession. Ford has said it expects to lose more than $1 billion for the year in its European operation. GM's quarterly earnings Thursday are expected to show major weakness from its European Opel division, which has recently ousted another chief.
U.S. sales averaged a 14.3 million pace in the first six months of the year, helped by a warm winter and old cars. Cars and trucks on U.S. roads averaged almost 11 years old last year.
Financing too has eased, analysts say. Makers were offering 0% loans on even some popular models. Borrowers with shaky credit were also having less trouble getting financing.
"Even if we do hit some months that are slower and we back off that 14-pace, you're growing, and that's the way to go because no one was expecting an immediate recovery after what we went through in 2008, 2009," said Jessica Caldwell, senior analyst at Edmunds.com.
Chrysler cited strength among its sedans such as its Chrysler 200, up 43% in July. Sales of its Dodge Journey, a full-sized cross between a station wagon and an SUV, surged 69%.
GM said its Cadillac sales were up 21%, thanks to its bulky Escalade model and the new XTS sedan, among others. But its other nameplates struggled.
Ford cited its best-selling F-Series pickup line, saying more fuel-efficient versions were popular.
Not Many Lemons
What the new normal will be remains to be seen. There's still pent-up demand from years of delayed purchases. But cars' odometers are more effortlessly crossing 100,000 or 200,000.
And automakers have fleshed out their offerings, moving into rivals' turf and boosting quality. Domestic manufacturers now offer popular smaller cars; Asian makers have pushed larger SUVs.
"I've never seen the market so competitive," Caldwell said. "There's so many products — so many good products. You can't really write off anyone and say they make a bad car, which wasn't always the case."
U.S. auto sales continued at a modest pace in July, but continued high unemployment and weak consumer confidence took their toll on GM and Ford.
Domestic sales at No. 1 U.S. automaker General Motors (GM) fell 6.4% vs. July 2011 to 201,237 vehicles. No. 2 Ford Motor (F) said sales fell 3.8% to 173,966. Both missed analyst forecasts.
High-volume, lower-margin fleet sales tumbled as expected. GM's dived 41% while Ford's sank 16%. But traditional retail sales also disappointed.
Chrysler's U.S. sales climbed 13%, topping at least some forecasts. But the Fiat-controlled automaker's gains are slowing from earlier this year as it rebounds from its bankruptcy and near-death three years ago.
U.S. automakers also face resurgent Asian makers rebounding from supply chain woes in the wake of Japan's earthquake and Thai floods.
Toyota's (TM) U.S. sales rose 26% to 164,898, just under targets by auto researcher Edmunds.com. Honda (HMC) climbed 45% to 116,944 units, also missing.
VW Still In Fast Lane
Meanwhile, Volkswagen (VW) U.S. sales rose 27.1% to 37,014 — its best July since 1973. Year-to-date VW sales are up 34.1%, helped by its new Tennessee plant.
The July sales data followed a spate of generally lackluster economic data, including Tuesday's Commerce Department report that Americans were saving more and spending less in June.
"What we're seeing is a consumer that's not spending money aggressively, and we need them to spend money aggressively," said Joel Naroff president of Naroff Economic Advisors.
Many major retailers will report July same-store sales data on Thursday morning.
Overall July U.S. sales appeared to run at about a 14 million vehicles seasonally adjusted annual rate, in line with estimates and July's pace. That's up from last year's SAAR of 12.8 million, but still well off the 16 million or so annually before the recession.
U.S. sales are increasingly important as Europe falls deeper into recession. Ford has said it expects to lose more than $1 billion for the year in its European operation. GM's quarterly earnings Thursday are expected to show major weakness from its European Opel division, which has recently ousted another chief.
U.S. sales averaged a 14.3 million pace in the first six months of the year, helped by a warm winter and old cars. Cars and trucks on U.S. roads averaged almost 11 years old last year.
Financing too has eased, analysts say. Makers were offering 0% loans on even some popular models. Borrowers with shaky credit were also having less trouble getting financing.
"Even if we do hit some months that are slower and we back off that 14-pace, you're growing, and that's the way to go because no one was expecting an immediate recovery after what we went through in 2008, 2009," said Jessica Caldwell, senior analyst at Edmunds.com.
Chrysler cited strength among its sedans such as its Chrysler 200, up 43% in July. Sales of its Dodge Journey, a full-sized cross between a station wagon and an SUV, surged 69%.
GM said its Cadillac sales were up 21%, thanks to its bulky Escalade model and the new XTS sedan, among others. But its other nameplates struggled.
Ford cited its best-selling F-Series pickup line, saying more fuel-efficient versions were popular.
Not Many Lemons
What the new normal will be remains to be seen. There's still pent-up demand from years of delayed purchases. But cars' odometers are more effortlessly crossing 100,000 or 200,000.
And automakers have fleshed out their offerings, moving into rivals' turf and boosting quality. Domestic manufacturers now offer popular smaller cars; Asian makers have pushed larger SUVs.
"I've never seen the market so competitive," Caldwell said. "There's so many products — so many good products. You can't really write off anyone and say they make a bad car, which wasn't always the case."