Ford Motor Co. and Chrysler Group LLC, leading a continued recovery for the U.S. auto market, said their deliveries climbed in June as the industry selling pace may accelerate to the fastest pace in 66 months.
Ford sales of cars and light trucks climbed 13% to 234,917, beating the 12% increase that was the average of 11 estimates. Deliveries for Chrysler, majority owned by Fiat SpA, increased 8.2% to 156,686 vehicles. General Motors Co. sales rose 6.5% to 264,843.
Americans are buying new cars and trucks at the fastest rate since 2007 as they replace the oldest vehicles ever on U.S. roads. Automakers including Chrysler and analysts said they expect pent-up demand, attractive financing offers and an improving economy will keep propelling industry sales as the Federal Reserve winds down its unprecedented easing programs.
“The same factors are still in place: Pent-up demand is unleashing, credit is cheap and widely available, and in terms of trucks, it’s all about the economy recovering and housing starts,” Michelle Krebs, an analyst at auto researcher Edmunds.com, said in a telephone interview.
Ford sales of F-Series pickups surged 24% to 68,009, the Dearborn, Michigan-based company said in a statement. GM’s Chevrolet Silverado deliveries climbed 29% to 43,259. Chrysler’s Ram pickup sales increased 24% to 29,644.
Sales for Chrysler, the third-largest U.S. automaker, have gained for 39 consecutive months. The Auburn Hills, Michigan- based automaker’s increase in June matched the average of 10 analysts’ estimates in a survey by Bloomberg News. GM’s sales exceeded the 2.1% average estimate of 11 analysts.
“The fundamentals for continued growth in the new vehicle sales industry are intact,” Reid Bigland, Chrysler’s U.S. sales chief, told reporters June 28 in Chelsea, Michigan. “The availability of credit for automotive loans is as good as it’s ever been. Pent-up demand is still a big factor out there. Even this telegraphing a little bit of tapering is a sign that the economy is getting better.”
Chrysler forecast an annualized industry sales rate, adjusted for seasonal trends, of 16 million for June. That projection includes medium-and heavy-duty vehicles, which typically account for at least 200,000 deliveries per year. GM predicted a 15.8 million light vehicle sales rate in an e-mailed statement from the Detroit-based company.
U.S. light-vehicle sales may have climbed 7.1% to 1.38 million, the average of 10 estimates in the Bloomberg survey. The industry sales rate may have risen to 15.6 million, the average of 17 estimates, from 14.4 million a year earlier. That would be the best monthly pace since 15.8 million in December 2007, according to researcher Autodata Corp.
The projected growth in June probably was led by Nissan Motor Co. and Ford, according to analysts. Ford, Chrysler and GM paced much of the industry’s expansion through the first five months of the year, with all three gaining market share. The last time all three finished the first half of a year having increased share was 1993, according to Automotive News Data Center.
Ford has gained the most share of any automaker in the U.S. this year. Joe Hinrichs, the company’s head of the Americas, told reporters June 27 that industry sales may have slowed the preceding week and pinned it on signaling by the Fed.
Federal Reserve Chairman Ben Bernanke said last month that the Fed will probably taper its $85 billion monthly bond-buying program later in 2013 and halt purchases around mid-2014, citing a slowly improving economy. Still, most members of the central bank committee don’t expect to begin raising the benchmark lending rate out of its lowest-ever range of zero to 0.25% until 2015.
“The industry was really strong in the first half of the month, but maybe slowed a bit in the last week,” Hinrichs said. “It will be interesting to watch where consumer confidence goes as the market kind of fluctuated in the last week and they talk around eventually higher interest rates, and what that means for consumers’ buying confidence.”
Nissan probably led all automakers with a 13% increase in U.S. sales, the average of eight estimates. The Yokohama, Japan-based company’s deliveries surged 25% in May, triple the industrywide increase, after cutting the price of seven models, including its top-selling Altima sedan.
Toyota sales probably rose 6.2%, the average of eight estimates. The Toyota City, Japan-based company sees stable rates for auto buyers in the near term, Bill Fay, group vice president for U.S. sales, said last month on Bloomberg Radio.
Honda Motor Co. deliveries may have climbed 10%, the average of eight estimates. Competitors may have a tougher time offering no-interest financing that Tokyo-based Honda Motor doesn’t offer once the Federal Reserve does begin raising interest rates, said John Mendel, Honda’s head of U.S. sales.
“If you’re a manufacturer that depends on zero percent financing to do your business, that proposition is going to get more and more expensive,” Mendel said last week in a telephone interview.
Combined sales for Hyundai Motor Co. and its affiliate Kia Motors Corp. may have slipped 1.7% in June, the average estimate of seven analysts. The Seoul-based carmakers have trailed industrywide sales growth in every month since September as they contend with production constraints and more competitive U.S. automakers.
Volkswagen AG, based in Wolfsburg, Germany, may post a 0.9% drop in combined sales for its VW and Audi brands in June, the average of four estimates.