Sales of cars light trucks rose 12% for Ford and Chrysler, according to company statements. The results compared with 10 analysts’ average estimates for gains of 10% by Ford and 13% by Chrysler in a survey by Bloomberg News.
Ford, Chrysler and General Motors Co. have closed unneeded factories and rolled out better cars that are drawing demand from both retail and fleet buyers, lifting the average prices paid for new vehicles to record highs. That means today’s industry is much healthier than six years ago, the last time automakers were selling as many cars and trucks as last month.
“In 2007, we were achieving that sales level by giving cars away because the auto companies had too many factories,” John Casesa, senior managing director at Guggenheim Partners LLC, said today on Bloomberg Radio. “Today, there’s real demand for that product. It’s a fundamentally different industry.”
U.S. car and light truck sales may have climbed 14% in August to 1.47 million, the average estimate of 10 analysts in the survey by Bloomberg News. Automakers last sold that many vehicles in one month in August 2007, according to researcher Autodata Corp.
The annualized industry sales rate, adjusted for seasonal trends, probably accelerated to 15.8 million, the average of 17 estimates, from 14.5 million a year earlier.
Chrysler today forecast a 16.1 million industry sales pace for August in its statement. The projection includes medium- and heavy-duty vehicles, which typically account for at least 200,000 deliveries per year.
Chrysler said sales of the Ram pickup surged 31% to 33,009 and Jeep Grand Cherokee jumped 40% to 17,976. The company controlled by Turin, Italy-based Fiat SpA reported gains for all five of its brands and extended a more than three-year streak of total U.S. sales increases.
Chief Executive Officer Sergio Marchionne is introducing new vehicles including the Jeep Cherokee sport-utility vehicle and Ram pickups to wean Chrysler from its past dependence on discounted deliveries to rental-car companies.
“We’re seeing Chrysler shift its sales, relying less on fleet sales,” Michelle Krebs, an analyst at auto researcher Edmunds.com, said before the carmaker released results. “It’s a positive in terms of profitability of the business and consumer satisfaction in terms of resale value of their vehicles.”
Edmunds, which tracks auto sales and pricing trends, estimated that about 20% of Chrysler sales last month were to fleet customers. That’s down from almost 30% a year earlier, Santa Monica, California-based Edmunds said. Even so, the carmaker’s deliveries rose for a 41st consecutive month.
Rental fleets used to be a dumping ground of sorts for American automakers with too much production and not enough demand for its cars. That’s changed after GM, Ford and Chrysler shed 29% of their combined capacity to build cars and trucks in North America from 2004 to 2012. They’ve also rolled out their most competitive passenger cars in a generation, led by GM’s Impala and Ford’s Fusion.
Fusion sales rose 14% last month. Ford plans to boost North American production in the fourth quarter by 6.8% to 785,000 vehicles, according to its statement. Third- quarter production plans were unchanged.
The average estimates of 10 analysts are for August sales to increase 11% for GM.
The self-restraint from doing too many sales to rental- fleet customers is lasting as the U.S. industry closes in on its fourth consecutive annual gain in car and light truck deliveries, the longest streak in more than a decade.
Sales to fleets probably were about 15% of the industry’s August total, analysts at LMC Automotive and Goldman Sachs Group Inc. said last month. Chrysler, Detroit-based GM and Ford each have reduced their share of fleet sales this year, according to Automotive News Data Center.
Toyota Motor Corp. expects to report a 20% retail sales gain in the U.S. in August for its namesake brand, Carly Schaffner, a company spokeswoman, said late yesterday. The anticipated increase, excluding sales to fleets and premium Lexus models, was led by Prius hybrids and the Camry sedan, she said.
Honda Motor Co.’s demand from retail buyers last month may have been strong enough to offset its opposition to fleet deliveries and still post the biggest sales increase among major automakers. The average estimate of seven analysts is for gains of 20% by Honda, 17% by Nissan Motor Co. and 15% by Toyota.
Hyundai Motor Co. and affiliate Kia Motors Corp.’s combined deliveries probably rose 9.2%, the average of seven estimates. The Seoul-based carmakers have trailed industrywide sales growth in every month since September 2012.
Volkswagen AG may post a 4.4% increase in combined August sales for its VW and Audi brands, the average of four estimates.