GM joins Ford in topping sales estimates to drive industry surprise - The Buffalo News

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GM joins Ford in topping sales estimates to drive industry surprise

General Motors Co. surprised investors with a U.S. sales gain after analysts projected a decline in June. Ford Motor Co., Chrysler Group LLC and Nissan Motor Co. beat estimates in what’s shaping up to be a big month for the industry.

GM’s sales rose 1 percent, beating the average analysts’ estimates for a 6.3 percent decline last month. Chrysler’s deliveries rose 9.2 percent in June, the company’s 51st consecutive monthly increase, while Ford’s light-vehicle sales decreased 5.8 percent, less than analysts’ estimates that projected a 6.6 percent decline. Toyota Motor Corp.’s sales rose less than analysts had estimated.

“General Motors is amazingly resilient,” said Michelle Krebs, a senior analyst at “Consumers recognize that the products GM is offering now aren’t the same as the recalled models. If you look at what’s selling, it’s the new stuff that’s doing really well.”

GM, trying to grapple with a recall crisis that erupted in February, faced a difficult June with the release of an internal investigation that found a lack of urgency in the engineering and legal departments led the automaker to take more than a decade to recall flawed 2.59 million Chevy Cobalts and other small cars linked to at least 13 deaths.

Chief Executive Officer Mary Barra returned to Congress last month for additional testimony on the matter and the company continued its stepped-up pace of recalls with the total reaching almost 29 million vehicles in North America.

While struggling with troubled products dating back more than a decade, GM’s newly designed vehicles drove sales last month to a total of 267,461 vehicles. Buick brand sales rose 18 percent, led by deliveries of the new Encore small SUV, for its best June since 2006. Chevrolet Tahoe SUV sales almost doubled while Cadillac Escalade deliveries rose 84 percent and Chevy Suburban sales rose 73 percent.

The new models are helping GM take advantage of an improving auto market. Aided by available credit and a strengthening economy with housing starts that remained near the 1 million mark in May, U.S. auto sales are headed for the biggest year since 16.15 million vehicles were sold in 2007.

Adjusting for seasonal trends, the annualized pace may have accelerated to 16.3 million in June, the average of 14 analysts’ estimates compiled by Bloomberg, from 15.9 million a year earlier. GM forecast a light-vehicle selling rate of 16.6 million. Chrysler and Ford projected a pace of 17 million, including medium-duty and heavy trucks, which typically account for at least 200,000 sales a year.

For the last two months, industrywide auto sales have been running at an annualized rate of 17 million, including medium and heavy trucks, John Felice, Ford’s U.S. sales chief, said today on a call with analysts and reporters.

“It was a really solid run rate the past two months for the industry,” Felice said. “We expect that to continue, especially into the first part of July with the promotional push by the industry” around U.S. Independence Day holiday July 4.

Chrysler delivered 171,086 cars and light trucks, aided by a Jeep brand sales gain of 28 percent, according to statements from the companies. Chrysler, the third-largest U.S. automaker, topped the average of eight analysts’ estimate for gain of 5.9 percent, helped by a 24 percent increase in sales of the Town & Country and a 22 percent gain by the Grand Caravan, both minivans. Ram pickup sales rose 12 percent to 33,149, the Fiat SpA-owned company said.

Nissan sales rose 5.3 percent, topping estimates for a gain of 3 percent. While Altima sales slipped 2.9 percent to 26,111, Sentra sales jumped 68 percent to 17,097 and Versa deliveries rose 33 percent to 11,613.

Ford’s light-vehicles sales declined to 221,396 as F-Series pickup and Taurus sedan deliveries fell 11 percent and 30 percent, respectively. Fusion family-car sales rose 14 percent to 27,604.

Chrysler’s namesake brand fell 12 percent to 24,026 deliveries. The new 200 family sedan sold more than 5,000 as inventories grew in dealerships, up from 595 in May. The cars are lasting 12 days, on average, on dealer lots, the company said. Including the previous version of the sedan, Chrysler sold 7,345, compared with 12,360 a year earlier.

Toyota sales rose 3.3 percent, just shy of the 3.5 percent average of eight analysts’ estimates.

“Sales in the first half of 2014 indicate a steadily recovering industry, and we expect this pace to increase as we move into the second part of the year,” said Bill Fay, group vice president for the Toyota Division. “In June, Camry and Corolla posted double-digit gains as passenger cars showed renewed strength industrywide.”

Honda Motor Co. may report a drop of 5.8 percent, while combined Hyundai Motor Co. and Kia Motors Corp. sales are projected to slide by 2.4 percent.

Total light-vehicle sales may slip 2.6 percent to 1.37 million for the month with one fewer weekend than a year earlier, according to the average of 10 analyst estimates compiled by Bloomberg.

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