June Auto Sales Unexpectedly Strong

Estimates could place 2014 sales at highest in eight years.

July 03, 2014

DETROIT — American auto sales grew at the fastest pace in eight years last month, surprising the industry and setting it up for a strong second half of the year.

Sales rose 1.2% over last June, to 1.4 million cars and trucks, according to Autodata Corp. GM, Toyota, Hyundai and Nissan all saw increases over last year, while Honda sales were flat, and Ford and Volkswagen were down.

June’s annualized sales rate — which estimates annual sales if they stayed at the same pace every month — was 16.98 million. That was the fastest pace since July 2006 and higher even than May, which also surprised the industry with its strength.

In a report from Associated Press, Jesse Toprak, an auto analyst for the car buying site Cars.com, said buyers are out because of low interest rates, a strong stock market — which improves confidence — and great new vehicles. An easing in lending standards is also adding more potential buyers to the market.

Toprak said he may increase his annual sales forecast from 16.1 million vehicles to 16.3 million based on May and June sales. That compares with 15.6 million vehicles sold in the U.S. last year.

Of particular note: GM’s sales were up 1% over last June despite a continuing parade of recalls. GM’s total safety recalls for the year reached 29 million vehicles on Monday, when the automaker announced six new recalls of 8.4 million cars. Two of those recalls were for ignition switch problems, the same issue that began the company’s recall crisis in February.

Kelley Blue Book analyst Alec Gutierrez told the AP that GM is benefiting from its new lineup of SUVs, which hit the market at a time when buyers are gravitating toward bigger vehicles. Sales of the Chevrolet Tahoe large SUV nearly doubled to more than 11,000, while sales of the GMC Yukon more than doubled to 3,946. Cadillac Escalade sales were up 57%.

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