US light-vehicle sales rise 9.2% y/y in June

Propelled by a surge in pickup truck demand, US light-vehicle sales grew a robust 9.2% year-on-year (y/y) during June to more than 1.404 million units. The market momentum continued to be driven by pickup truck sales which grew more than 11% y/y to 695,789 units, while sales of passenger cars grew 7.5% y/y to 708,645 units. Factoring in the June sales, the year-to-date (YTD) light-vehicle sales gained 7.7% y/y to 7.829 million units.

Detroit automakers

All three Detroit automakers, the primary beneficiaries of the rebound in large pickup sales, reported y/y gains in sales and market share in June. Ford was the pick of the month with its sales totalling 234,917 vehicles, up from 207,204 a year ago, with 35% of sales going to fleet buyers. The Dearborn-based automaker said sales of its small cars – Fiesta, Focus, and C-Max – jumped 39% y/y to 35,851 units, while deliveries of the redesigned Escape crossover increased 1% y/y to a monthly record of 28,694 units, while Lincoln volumes slipped 1% y/y. Ford sold over 68,000 units of the F-Series full-size pickups, a 24% y/y jump.

Chrysler, meanwhile, saw its sales rise 8.2% y/y to 156,686 vehicles, marking its 39th straight month of y/y sales increases. The company's Ram brand posted a 23% y/y sales increase in June, while Dodge was up 12% y/y. Volumes rose 1% y/y at both Fiat and Chrysler brands. Jeep deliveries also rose slightly compared with June 2012. "The fundamentals for continued industry gains in new vehicle sales remain intact", Reid Bigland, head of US sales for Chrysler, said in a statement.

General Motors (GM) saw sales expand 6.5% y/y to nearly 265,000 vehicles. Deliveries of the Chevrolet Silverado rose 29% y/y and those of GMC Sierra jumped 32% y/y. Sales rose 5% y/y at GMC, 7% y/y at Chevrolet and 15% y/y at Cadillac, while Buick deliveries slipped 4% y/y. GM said its retail sales rose 14% y/y during June while fleet shipments declined 9% y/y. Sales of the plug-in hybrid Chevrolet Volt jumped 53% y/y to 2,698 in June, up 11.8% y/y during the first half of 2013.

Japanese automakers

Among the Japanese automakers, Toyota managed to remain the third-highest seller during June, with its sales rising nearly 10% y/y to 195,235 vehicles. Toyota, which has a goal of keeping Camry the top-selling US car for a 12th consecutive year in 2013, saw sales of the mid-size sedan gaining 12% y/y in June, thanks to no-interest loans. Likewise, a renewed advertising campaign for the four-model Prius line-up saw sales of the hybrid rise 10% y/y. Camry sales were 207,626 in the first half, ahead of Honda's Accord with 186,860, according to figures released by the companies.

Nissan, benefitting from price cuts on seven models announced in early May as well as higher incentives, sold 104,124 vehicles in June, up nearly 13% y/y and a record for the month. Nissan brand sales jumped 16.1% y/y, while sales at the Infiniti luxury brand fell 12.7% y/y to 9,114, in part reflecting the changeover to new models. Model-wise, Altima sales set a new June record of 26,904, a 23% y/y jump. Sentra sales rose 11% y/y and Rogue sales jumped 41% y/y. The Pathfinder SUV's sales tripled y/y to 8,360 units, marking the best June ever for the model. Sales of the company's all-electric Leaf vehicle quadrupled to 2,225 units for its second best-ever month. Nissan has sold 9,839 Leafs this year through June 30, more than the company sold in the US for all of 2012.

Honda's sales also grew nearly 10% y/y to 136,915 vehicles. Accord sales climbed 9.5% y/y to 31,677 units, topping 30,000 units for the fourth consecutive month in June. Civic compact deliveries rose 8.1% y/y to 29,724 units. Sales of the Acura luxury brand fell 10% y/y.

Mazda continued to gain traction with a 13% y/y gain in June deliveries on higher Mazda6 and CX-5 demand.

Helped by strong Forester, Outback and Crosstrek demand, Subaru remained the top industry gainer in June with sales of more than 39,000 units, a 41.6% y/y jump. Subaru's sales have now jumped nearly 25% y/y in the first half of this year.

Other automakers

June sales at Volkswagen (VW) fell marginally to nearly 51,000 units, contracting y/y for a third consecutive month. Combined sales for Hyundai and affiliate Kia, which operate separately, totaled 115,543 last month, up a mere 0.4% y/y. Deliveries for the Hyundai brand rose nearly 2% y/y to 65,007 units, a company record for the month, thanks to a surge in Elantra sales and higher demand for the redesigned Santa Fe crossover. Hyundai said fleet deliveries represented 19% of its June volume. Deliveries at Kia slipped 1.5% y/y to 50,536 units.

Outlook and implications

The US light-vehicle market posted higher-than-expected growth in June, propelled mainly by a consistently healthy demand for large pickups and crossovers. With a seasonally adjusted selling rate (SAAR) of 15.9 million units, the June light-vehicle sales rate came in slightly above consensus expectations for the month. It was the highest monthly SAAR level since November 2007, and a marked jump from the 14.9-million unit running rate realised just two months ago. Although some volatility can be expected within the month-to-month sales rates, this result reflects the continued momentum within the auto sector, especially given the fact that incentives remain fairly steady. There were 26 selling days this June, one less than a year ago, making the volume growth for the month even more impressive. Apparently, June sales started off strong because of extended Memorial Day holiday deals and then slowed briefly before regaining momentum on early July 4 holiday incentives.

A big chunk of June sales gains was unmistakably contributed by pickup demand as construction workers and oil drillers bought more trucks to meet growing demand for their services, a trend that major automakers expect to persist throughout the year, thanks to increased activity in the home-building and energy sectors, which are key buyers of pickup trucks. Ford, GM and Chrysler sold a combined 157,480 large pickup trucks in June, 26% more than a year ago. At 46.7%, collective market share for the Detroit Three was up slightly in June compared to May and in-line with year-ago levels. For the first time this year, growth at all three major Japanese automakers was above the market pace, helping all three pick up some market share.

The upbeat June sales have also reinforced the belief that the industry's recovery will remain robust in the second half of the year. While remaining healthy, month-end stocks at the end of June for the Detroit manufacturers were level with inventory levels at the end of May and we expect these automakers to make a continued push on the supply side as they anticipate continued sales momentum heading into the second half of 2013. Sustained inventory coupled with improved credit availability, a churn of old vehicles needing to be replaced and high quality new products being introduced produces a welcoming purchase environment for consumers. With consumer sentiment at its highest level since July 2007, a recovering housing market and stable fuel prices, IHS Automotive expects auto sales to remain a bright spot within the economy. Against this backdrop, our projections for 2013 and 2014 US light-vehicle sales will be upgraded approximately 100,000 units per year to 15.4 million and 15.8 million, respectively, in the upcoming July forecast round.