July 2014 Auto Sales: Deals and Credit Fuel Sales of Crossovers and Trucks
By: Jeff Youngs, 8/4/2014
Americans continued buying new crossover SUVs and pickup trucks in increasing numbers last month, pushing July 2014 new-vehicle sales to pre-recession levels for a fifth straight month. According to Automotive News, strong retail demand, low interest rates, easily available credit, and higher incentives and rebates as dealers close out the 2014 model year are responsible for fueling sales in July, combined with consumer sentiment that the U.S. economy is stable and growing.
Kurt McNeil, head of U.S. sales operations for General Motors (GM), told Automotive News: "The economy has bounced back strongly from the harsh winter, consumer confidence has reached a post-recession high, energy prices remain moderate and job growth continues. The stage is set for strong sales through the balance of the year."
Typically, summer is when automakers increase spending on incentives and rebates in order to help dealers clear inventory of current model-year vehicles in advance of new models arriving in showrooms. Truecar, a dealer lead-generation service, estimates that the value of incentives and rebates to consumers was 7% higher in July 2014 compared with July 2013. Larry Dominique, executive vice president of Truecar, told Automotive News that he expects deals to remain strong through the end of the year.
Morgan Stanley's Adam Jonas continued to sound alarms about the industry's robust sales performance and the current nature of consumer demand. Jonas told Automotive News: "The U.S. auto cycle has clearly moved from a 'need to buy,' to an 'I just want to buy' type of consumer mindset," Jonas said in a report. "Consumers buy cars like they buy houses--lower payment, bigger car. There is a dark side to all this."
Industry analysts now expect new-vehicle sales to reach 16.3 million for 2014.
Highlights: July 2014 Car Sales
Consumers continue to demonstrate a preference for crossover SUVs and pickup trucks. According to GM, across all of its brands, sales of crossovers rose 22% compared with July 2013, while sales of pickup trucks rose 12%. Chrysler is seeing the same trends, in large part crediting the Cherokee for Jeep's 41% year-over-year increase, while Ram brand sales rose 18%.
Compare these performances to the Volkswagen brand's decline. It has no pickup truck to sell, and the company's only crossover SUV is the Tiguan. In a U.S. market favoring trucks and crossovers, VW's year-over-year sales declined 15% in July 2014, dragging Volkswagen Group's overall sales down by 6%.
Additional detail about July 2014 car sales is provided in the sections that follow:
American Honda--American Honda sales slid 4% in July, with Acura sinking 18% and Honda declining 2%. The company reported that sales of the Acura MDX, Honda CR-V, and Honda Accord were robust in July.
BMW Group--BMW Group's overall sales rose 7%, with the BMW brand up 10% and Rolls-Royce rising 6%. Mini showed a decline of 2%, but wider availability of the redesigned 2014 Cooper Hardtop stemmed greater losses.
Chrysler Group--Chrysler Group sales rose 20% compared with July 2013. Every brand saw year-over-year increases, with Jeep leading at 41%, followed by Ram at 18% and Chrysler brand at 17%. Dodge and Fiat also demonstrated improvement, at 3% and 1%, respectively.
Daimler AG--Daimler AG enjoyed a 16% uptick in sales, with Smart up a remarkable 57%. Mercedes-Benz sales also rose by 15% compared with July 2013.
Ford Motor Company--Ford Motor Company demonstrated a 10% improvement in sales, with the Ford brand improving 9% and Lincoln rising 14%.
General Motors--Though Cadillac continued to struggle, down 3% in July despite the arrival of an all-new Escalade and the redesigned CTS, overall sales at General Motors increased 9%. Buick and Chevrolet each posted an 8% gain, while GMC was up 22%. GM trucks saw a 12% increase while crossover SUV sales rose 22%. Car models slipped 4% in July.
Hyundai Group--Hyundai brand set a July sales record at 67,011 units, representing an increase of 2% over last July. Kia sales also rose by 7%, giving Hyundai Group a collective sales increase of 4%.
Jaguar Land Rover--Land Rover continued to support Jaguar, offsetting the latter's steep 26% decline in sales with a 15% increase in SUV deliveries. Overall, Jaguar Land Rover enjoyed a 3% increase in sales.
Maserati--On the strength of a redesigned Quattroporte and the new Ghibli, Maserati sales rose 324% compared with last July, selling 1,132 units this year compared to 267 units last year.
Mazda--Mazda sales rose 17% in July, to 29,238 units. Mazda hasn't sold that many vehicles in a July sales month since 1993, and credits the success of the Mazda 3, Mazda 6, and CX-5 for the improvement.
Mitsubishi--On the strength of the Outlander Sport crossover SUV and the new Mirage city car, Mitsubishi sales rose 21% over July 2013. Notably, Lancer Evolution sales have increased 10%, following Mitsubishi's announcement that the iconic performance model will be discontinued.
Nissan Group--Nissan Group's sales rose 11% to a new July record, with the Nissan brand improving by 12% and Infiniti bettering its previous July performance by 10%.
Subaru--Subaru sold more vehicles in July 2014 than it has in any month in its history, the company said. Sales rose 27% over last July, and the company expects continued success with the arrival in showrooms of the redesigned Legacy and Outback models.
Tesla--Tesla sales rose 28% in July and the company is currently preparing its factory to build a new Model X electric crossover SUV.
Toyota Group--Toyota Group sales rose 12% in July, with the Toyota brand rising 12% and Lexus improving by 19%. Scion sales declined 18%.
Volkswagen Group--At Volkswagen Group, Porsche sales were up 13%, Audi sales increased 12%, Bentley improved by 4%, and Lamborghini rose 2% in July. Yet, overall Volkswagen Group sales fell 6% in July due to a 15% decline for Volkswagen brand models.
Volvo--Volvo sales declined 17% in July, reflecting the company's wind-down of the C30 and C70 models, which have been discontinued.