A blazing July sun had nothing on the hot pace of US light vehicle sales. Fired up by employee pricing incentives from all three Detroit automakers, Americans snapped up over 1.8 million cars and trucks for an annual sales rate of 20.83 million light vehicle sales.
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Adjusted for daily sales rates (DSR), Ward’s said last month’s turnover was 20.5% up on July 2004.
The new incentives worked their magic for the domestic brands which regained more than three points of market share compared to last July.
Though volume was down from June, GM still enjoyed its best July since 1979, up 19.7% from a year ago. Car sales declined due to reduced fleet purchases but trucks had another good month, second only to the all-time record set in June. Cadillac passed BMW and now trails only Lexus in year-to-date (YTD) premium vehicle sales.
Ford celebrated a robust 32.9% improvement, enough to give it a new July sales record and put the blue oval in the black in YTD sales for the first time since February 2003. The F-series racked up 126,905 sales, eclipsing the record set last month by the Chevrolet Silverado and setting a modern industry record for single month sales. Sales of Ford-branded SUVs were also up, though Mercury and Lincoln models fell short of their 2004 marks.
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By GlobalDataThe new Range Rover Sport helped Land Rover to a 110% improvement though other Ford PAG brands did not fare as well: Volvo’s results were down 2.6% and Jaguar sales plummeted 39.6% to the lowest volume of any luxury marque.
DaimlerChrysler was two-for-two. Chrysler Group recorded its best retail sales month ever and Mercedes posted a record July. The Jeep brand had its own best-ever month with 56,280 sales, up 53%. Ram pickup sales improved for the first time in months, boosting the Dodge truck to third place in the July standings.
There was plenty of good news to go around. Toyota set another all-time sales record, as did Nissan. Hyundai also set an all-time record and Honda, Infiniti and Lexus set new monthly benchmarks.
Even Mitsubishi had reason to celebrate. Though sales were down 3.6%, volume passed the 10,000 mark for the first time since last August. Volkswagen and Isuzu were the only other manufacturers to undercut their July 2004 figures, and, while Audi and the redesigned Jetta provided a silver lining to Volkswagen’s cloud, Isuzu’s meagre 845 July sales raise questions about when GM will finally pull the plug on the brand which now sells only re-badged GM trucks built in North America.
Unconcerned about future fuel costs, Americans bought pickups, minivans and SUVs in record numbers last month. Light trucks and crossovers captured over 60% of the market and pickups were the big winners, taking the top three spots and accounting for almost 23% of total sales.
GM said it would end its employee pricing promotion but changed its tune after Ford extended its programme to the end of August. Chrysler followed suit, perhaps a dangerous move. Chrysler, Ford and GM are giving up much-needed profit and analysts estimate as many as 200,000 future sales already have been pulled forward. In addition, plans to reduce sticker prices to more accurately actual transaction prices could be jeopardised if consumers cannot be weaned from rebates and subsidised interest rates through captive finance units.
Recent sales numbers may have been intoxicating, but it is possible nasty hangovers await the Detroit automakers and their shareholders in the months to come.
Bill Cawthon
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