You are here
US July auto sales see fast start with Fiat Chrysler, Nissan
[NEW YORK] US auto sales for July got off to a faster start than analysts had predicted. Nissan Motor Co beat estimates, as did Fiat Chrysler Automobiles NV, which projected a better month for the industry than the rosiest analyst.
Fiat Chrysler's North American unit delivered 178,027 vehicles in the US last month for a 6.2 per cent gain that topped the 4.8 per cent average analyst prediction compiled by Bloomberg. The group has reported 64 straight monthly increases. Nissan's July US auto sales rose 7.8 per cent, beating the average estimate for a 5.3 per cent gain. Ford Motor Co's light- vehicle sales rose 5 per cent, compared with estimates for a 1.8 per cent increase.
US consumers are choosing SUVs and pickups, taking advantage of relatively cheap lending terms and gasoline prices. This surge in demand for profitable light trucks plays to the strength of Fiat Chrysler, which gets most of its sales from pickups, SUVs and vans.
"Strong demand for crossovers such as Rogue and Murano drove Nissan's overall light-truck sales up 22 per cent and set a July record for the company," said Fred Diaz, senior vice president, US sales and marketing and operations.
Japan's second-largest automaker by global sales reported July records for the company and for the Nissan brand, which reported sales of crossovers, trucks and sport-utility vehicles rose 22 per cent. Sales of its luxury Infiniti brand rose 22 per cent to 10,433, powered by a 68 per cent rise in QX60 SUV sales.
Fiat Chrysler's North American unit projected stronger results than analysts had estimated. The Auburn Hills, Michigan- based automaker predicted a July sales pace, adjusted for seasonal trends, of 17.8 million including medium and heavy trucks, which usually account for at least 200,000 yearly sales.
The average of 11 estimates of the light-vehicle selling rate was 17.2 million, keeping the industry on track for its best sales year in a decade. The fastest pace in the Bloomberg survey was for 17.3 million, predicted by Patrick Archambault of Goldman Sachs and Chris Hopson of IHS Automotive.
"Analysts are playing it very conservatively, and we are beginning to consistently see these automakers strongly beat estimates," said Michelle Krebs, an analyst with AutoTrader.com. "There are definitely some economics involved with these strong numbers, such as employment having improved. Again, the story is the same. People are going after SUVs and crossovers."
Analysts predicted that industry sales volume in July will be 1.48 million.
General Motors Co may report a gain of 0.6 per cent in July, while Toyota Motor Corp may report a 0.1 per cent drop from a year earlier, according to estimates compiled by Bloomberg, while Honda Motor Co may have a 4.7 per cent increase.
Jeep Boom Sales of the Chrysler 200 almost doubled to 15,108, helping the three-vehicle Chrysler brand to a 9.7 per cent gain for the month. It was the 200's 11th straight monthly sales record. Jeep brand sales jumped 23 per cent for its best July ever, as all models posted increases, led by the Wrangler and Cherokee. Ram pickups rose 1.1 per cent to 36,019. The small gain delivered the line's best July in 10 years.
Fiat Chrysler's sales-gain streak dates to the 2009 exit from bankruptcy of the automaker formerly known as Chrysler.
Despite the revival, Sergio Marchionne, Fiat Chrysler's chief executive officer, has renewed a push this year for consolidation, contending that the industry's profitability even in peak years doesn't generate enough returns to support investment costs.
Fiat Chrysler needs to boost profit to generate sufficient cash to develop the next generation of vehicles and technologies. Potential merger partners, including GM and Ford, have said they're not interested.
The automaker last week accepted a record penalty from US regulators for mishandling recalls. Profit from North America has helped boost results, letting the Italian-American automaker expand the Alfa Romeo and Maserati brands.
Results from the US are helping. Fiat Chrysler last week raised its full-year earnings forecast after Jeep sales and growth in North America propelled a 58 per cent jump in second- quarter profit.
Mr Marchionne said he was able to boost profitability in the US by cutting back on dealer discounts and increasing retail deliveries at the expense of less-profitable sales to rental-car companies and other fleet buyers.
Fiat Chrysler shares rose 1.7 per cent to US$16.08 at 9:09 am New York time before regular trading. The stock had risen 36 per cent this year through Friday.