Analysts were starting to worry about auto sales, but June's results shrugged those worries off: U.S. car and light-truck sales were up 22% over year-ago numbers, blowing away analyst estimates, and putting an exclamation point on the best first half for auto sales since 2008.
While there are still very good reasons to be concerned about still-subdued auto sales, June's numbers give reason for broader optimism. And while there's still plenty of room for growth, quite a few of the automakers are thriving.
The Big Three beat estimates
Analysts expected subdued year-over-year results for General Motors
But all three reported better gains than expected:
- General Motors posted a 16% year-over-year gain, well ahead of the 7% to 8% widely expected. It was GM's best month, fueled, in part, by a surge in fleet sales -- up 36% over year-ago totals. That's a big gain that probably had more to do with the timing of some big deliveries than it did with any change in strategy by GM. Retail sales were still strong – up nearly 8%, led by strong results for the Chevy Malibu (up 32%), and Buick LaCrosse (up 21%), as well as solid sales for GM's “crossover" SUVs.
- Ford sales were up a bit over 7%, led by impressive SUV and truck sales. The small Escape SUV posted its best month ever, with a 28% sales gain, as early examples of the all-new 2013 model flew out of dealerships. Ford also saw continued strong sales of its Explorer SUV (up 35% over June 2011), Fusion sedan, and still-hot F-series pickup line, which had its best June in five years. Ford has hinted that production of its popular Explorer and Focus are maxed out, or nearly so; a strong debut for the Escape, and upcoming all-new Fusion, will be essential to maintaining the Blue Oval's growth.
- Chrysler had its best June in five years, with a 20% increase over strong year-ago numbers, ahead of the 18% expected by analysts. SUVs were strong here, as well, as Jeep sales were up 23%, and the Chrysler brand's recently-refreshed big 300 sedan saw a huge 179% year-over-year jump.
Toyota and Honda continue a strong recovery
The Japanese giants' results came in a bit below (somewhat extravagant) analyst estimates, but they were strong nonetheless:
- Toyota sales were up 60% over last year's very difficult June, enough to solidify the company's hold on third place in the U.S. market behind GM and Ford. Nearly every Toyota model saw a significant increase, with some -- like the Prius line -- posting totals that were four times year-ago numbers. Sales of the latest Camry, introduced late last year, continued to be white-hot, as did sales of all of Toyota's hybrids. The company's premium Lexus brand is also recovering nicely, with an 86% year-over-year gain for the month.
- Honda posted a 48.9% year-over-year gain, a bit shy of the expected 51% increase, but still a strong result. Honda continues to recover not only from the tsunami, but from additional production disruptions stemming from severe flooding in Thailand late last year. As with Toyota, nearly all of Honda's models posted big gains, led by an 84% year-over-year increase for the mainstay Accord sedan. Unlike Toyota, however, Honda's hybrid models are struggling, and its Fit subcompact -- long seen as the class standard-bearer -- trailed both Ford's Fiesta and Chevy's Sonic in the sales charts.
Meanwhile, Nissan (OTC: NSANY), which was relatively unaffected by last year's disasters, posted a strong 28% gain on big sales of SUVs, even as sales of the acclaimed all-electric Leaf slumped significantly. And Hyundai (OTC: HYMTF), which saw huge gains a year ago, managed an 8% gain on strong sales of the midsized Sonata sedan. Like Ford, Hyundai's production of some key models may be maxed out -- the company said it had just 28 days' worth of inventory at the end of the month, far below the 50-to-60 days' worth that most manufacturers target.
The upshot: Falling gas prices may be helping
Sales of trucks, SUVs, and big cars, like the Chrysler 300, led the way in June. To some extent, that's the nature of the comparison -- high gas prices a year ago were nudging consumers toward smaller cars, and that pressure has eased somewhat. But with gas prices down significantly from the $4-plus levels seen just a few months ago, buyers may be feeling more comfortable with larger vehicles.
That will be good for the automakers if it continues -- trucks and SUVs are generally more profitable than smaller cars -- but will it? We'll find out.
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Fool contributor John Rosevear owns shares of Ford and General Motors. Follow him on Twitter at @jrosevear. The Motley Fool owns shares of Ford. Motley Fool newsletter services have recommended buying shares of Ford and General Motors, as well as creating a synthetic long position in Ford. Try any of our Foolish newsletter services free for 30 days. We Fools don't 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.