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The light vehicle sales in June depict a picture that does not indicate an immediate recovery in the U.S. auto industry as expected. Sales in the month grew 14.4% to 981,258 vehicles. However, sales in terms of seasonally adjusted annual rate (SAAR) were gloomy on a sequential basis.
As per Ward’s autodata, light vehicle sales in June stood at 11.08 million units at SAAR, the lowest since February this year. Despite being up 14% from June 2009, SAAR sales declined 4.6% from May.
This signifies a fall in consumer confidence in the economy based on high unemployment and lower home values. A recent survey by the Conference Board has revealed that the percentage of Americans planning to buy a new car in the next six months will decrease to 1.2% from 2.7% in May.
All the major automakers reported a double-digit rise in sales, except Chrysler and Toyota Motor Corp. (TM - Analyst Report). However, the percentage gains of the corresponding automaker are much lower than that in May.
U.S. Automakers
Sales at General Motors rose 11% to 194,380 vehicles from June 2009 due to a strong demand for its crossovers and a recovery in demand for pickups. However, sales dipped 13% from May 2010 due to a slowdown in the overall industry sales.
Sales of GM’s four core brands – Buick, GMC, Chevrolet and Cadillac – rose 36% driven by strong demand for redesigned vehicles including Chevrolet Equinox SUV, Buick LaCrosse sedan and GMC Terrain crossover.
Ford Motor (F - Analyst Report) witnessed a 15.4% rise in sales to 170,900 vehicles (excluding Volvo cars). This was mainly driven by strong sales of its F-Series pickup (58%) and the new Ford Mustang (37%). However, sales dipped 13% from May due to the industry slowdown.
Ford’s car sales were up 16%, utilities 3% and trucks 25%. Combined sales of the Ford, Lincoln and Mercury brands rose 28% to 954,745 vehicles. Among the three core brands, Mercury topped in terms of sales growth (26.2%). This can be attributed to the huge sales promotion for the brand, as the dealers need to clear their inventory in the wake of the brand’s discontinuation by the end of this year.
Meanwhile Volvo, which is to be sold to China’s Zhejiang Geely Holding Group, clocked a 29.1% decline in sales to 4,995 units during the month under study.
Sales at Chrysler (including the Chrysler, Dodge, Jeep and Ram brands) escalated 35% year over year but slid 12% sequentially to 92,482 vehicles in June. The Chrysler brand sales were up 30%, Dodge brand sales spiked 67%, Jeep brand sales increased 25% and Ram brand sales inched up 7%.
Japanese Automakers
Toyota’s sales rose 7% but dropped 14% from May to 140,604 vehicles. This reflected the automaker’s jolted reputation due to its latest string of safety recalls as well as a weakness in the overall economy.
Toyota has been hit hard in its passenger car sales. Its passenger car sales fell 2.2% to 73,811 vehicles, including a 6.6% decline in Lexus car sales to 8,149 units. However, total light truck sales rose 23.6% to 58,644 units, including a 23% increase in SUV sales for the month and a 12.2% gain in total pickup sales.
Sales at Honda Motor Co. (HMC - Analyst Report) gained 6.2% but dropped 9% from May to 106,627 vehicles. The automaker’s car sales increased 7.8% to 62,229 units, while truck sales grew 3.9% to 44,398 units. Honda brand sales went up 4% to 95,788 units and Acura brand sales surged 30.9% to 10,839 vehicles.
Nissan Motor (NSANY) has reported a 10.8% rise in sales to 64,570 vehicles. However, sales in the month slashed 23% on the back of slowing industry sales. Sales at the Nissan Division rose 8.2% to 56,266 units during the month. Meanwhile, sales at the Infiniti division grew 31.7% to 8,304 vehicles.
Nissan’s total car sales rose 6.2% to 42,674 units while total truck sales increased 20.8% to 21,896 units. Sales of popular models such as Versa went up 23.6% and Sentra rose 6.1%, while that of Altima fell 2.6%.
Global Automakers Elsewhere
Daimler AG (DDAIF) has recorded a 20.3% rise in sales to 19,574 units of Mercedes-Benz and “smart” vehicles. The company’s Mercedes-Benz USA division posted a 20.5% rise in sales to 18,269 units. However, sales from smart USA plummeted 48.3% to 577 units from the previous year.
Sales at South Korea's Hyundai Motor Co. soared 35% to 51,205 vehicles. This was driven by an impressive 49% sales growth of the redesigned Sonata sedan. Hyundai's sister company, Kia Motors America, recorded a 19% rise in sales to 31,906 vehicles.
Our Take
The slow U.S. auto sales in June cautions us of the negative effects of the economic downturn that lingers in the industry. However, automakers are predicting a gradual recovery in the second half of the year. Full-year industry sales are projected to be 11.5 million–12 million units, an improvement from the historic low of 10.4 million units last year. However, the June results clearly indicate that a decline in the unemployment rate and stabilization in financial markets are imperative to cushion the industry.

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