The world's largest carmaker, Toyota (NYSE:TM), is having a great summer in the United States. After a bumper Memorial Day weekend sale in May that pushed the month's sales up by 12.6%, the company reported strong results for June as well.
The sales momentum couldn't have been better timed. June's seasonally adjusted annualized rate, or SAAR, is projected to reach 16.3 million vehicles, and the month's average transaction price should be 1.4% higher than last year, according to Kelley Blue Book's estimates. Toyota's U.S. bosses are already seeing if it's possible to increase production to meet the increased demand. Let's find out what lies behind Toyota's current success.
Camry and Corolla -- America's most wanted
Toyota's consolidated June sales (including its Toyota, Lexus, and Scion brands) hit 201,714 units in he U.S., a 3.3% improvement from the previous year. The numbers get even more impressive once we adjust sales for the two fewer selling days in the current period as compared to June 2013. On an apples-to-apples basis, sales were up 11.9% compared to the year-ago period, marking the second consecutive month of double-digit sales gain. A lot of this increase is coming from the staples like Camry and Corolla.
Toyota Camry, which has been around for 31 years and is owned by 10.3 million drivers in the U.S., remained an ace performer in June. After earning the trust of Americans, it continues to be the most sold passenger vehicle in the country. Camry sales grew 13.4% in June to 40,664 units in the U.S. against the same period last year, beating its old competitor Honda Accord by a margin of more than 8,000 cars. It sold so fast that, on average, almost every minute an American buyer took home a Camry.
Sales of the world's most popular compact sedan, Toyota Corolla, reached nearly 31,000 units, a growth of 17% compared to the June of last year. Of all the Toyota cars sold globally, the Corolla constitutes greater than 40%, and Toyota has crafted the latest model with care. The 2014 model has a sportier look and better fuel efficiency and the effect is visible in the sales numbers. In the U.S., year-to-date sales have increased 9.7% over last year to 174,354 units, ahead of Honda's Civic, which is up 5.3% with sales of 167,097 units.
Both Camry and Corolla also saw plenty of fleet sales.
Lexus -- the company's blue-eyed boy
Sales of Toyota's Lexus luxury brand went up to 23,518 units in June, 10.1% higher from 2013. This is reportedly the brand's best June since 2007. Lexus passenger car sales are up 20% through the first six months, while utility vehicles have increased 14% year over year in the same period.
In the first six months of the year, the Lexus brand has grown faster in the U.S. than its European counterparts Mercedes-Benz and BMW and has narrowed its sales gap with both. In the first half of 2014, Lexus sales grew 17%, while Mercedes-Benz's sales were up 8%, and BMW's 12%, against the year-ago period. The sales gap between Lexus and BMW came down to 18,693 units, from 21,956 units, and the one with Mercedes-Benz came down to 24,428 units, from 32,958 units, in the first half of 2013.
Toyota's luxury vehicle sales in the U.S. could climb even higher once the midsize crossover Lexus NX 200t and RC sports coupe launch later in the year. According to Lexus vice-president and general manager Jeff Bracken, luxury crossovers and luxury sport coupes are "two of the hottest segments in the industry."
Crossovers and minivans
Toyota's utility vehicles did well, with Highlander SUV sales up 4.2% over last year to 11,555 units in June, and RAV4 up 12.9% to 23,465 units in May. RAV4 saw the fourth-highest sales in the highly contested compact crossover segment during the month and was barely 200 units behind the Chevrolet Equinox that held the third spot.
Minivans also saw some success in the month. The 4Runner, a major draw in the large sport utility category, sold well in the U.S.; 5,761 units were sold in June, a 42% increase over the last year.
Toyota continues to impress in the U.S. Now that the industry is expanding, there's an even greater opportunity to grow sales. The solid June results are a testimony to the company's success across product categories and its perfect understanding of the market's pulse.
ICRA Online has no position in any stocks mentioned. The Motley Fool recommends BMW. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.