Sales of Hondas and Toyotas surged in July while those of GM and Ford fell compared to the same month of last year, suggesting that the gains US automakers enjoyed last year may have been largely due to production slowdowns caused by the March 11 earthquake and tsunami.
“Toyota and Honda have regained all of the share they lost, and much faster than we thought they would,” said Jesse Toprak, head of market intelligence for TrueCar.com. “Their customers appear to be a lot more loyal than we gave them credit for.”
During July in which overall car and truck sales rose 9% to 1.15 million, GM’s sales fell 6% while Ford’s fell 4%. Meawhile Honda saw sales shoot up 45% and Toyota 26%, according to Autodata Corp. Much of the Japanese gains are due to a severely lowered base last July. Toyota had virtually no Priuses to sell last summer.
To the dismay of US carmakers who had hoped their market-share gains would be permanent, models that were popular last year seem to be losing their steam. Sales of the Chevy Cruze, last July’s top-selling subcompact, plunged 40% in July. The Honda Civic, saw sales jump 78% to over 25,000, overtaking the Cruze. Toyota Corolla — an older car with fewer features — also passed both the Cruze and the Ford Focus in July sales.
In fact, Toyota’s 14.3% US market share in July is back to pre-quake levels while GM’s share of 17.4% is also back to pre-quake levels after climbing to 20.3% last July.
US auto sales in July remained at about the same level as June’s 14.1 million units on an annualized basis. That’s higher than the 12.8 million sold in 2011, but lower than the 14.5 million pace logged in the first quarter of the year.
“Our feeling is we’re not going to get that lift in the second half of the year that we expected,” said Toprak. He has lowered the full-year forecast to 14.3 million cars and trucks.
While sales aren’t expected to return to the 17 million autos sold in 2005, the number of people driving aging cars will eventually translate to improving sales levels. Dealers have also begun offering incentives like discounts and low- or no-interest financing that could spark a sales rally later in the summer and the fall. Typical auto loan rates are at around 3%, about half the rate prevailing two years ago.
For example, Volkswagen’s incentive spending jumped 38% in July, according to TrueCar.com. It is now offering zero percent financing for five years on all non-diesel 2012 models. GM and Ford, on the other hand, have reduced incentive spending to improve brand image, probably at the expense of some sales, Toprak believes.
GM and Ford have suffered losses of 15% and 16%, respectively, in fleet sales to government, corporate and rental companies, accounting for much of their sales decline in July.
GM sales declined for Buick, GMC and Chevrolet but demand for the XTS sedan helped it log a 21% jump in Cadillac sales. The company said it isn’t planning to change its marketing strategy. Analysts see that as a sign that sales will continue to slide because the company’s advertising hasn’t communicated the improvements in its product lineup.
For has lost 11% in sales of its Lincoln luxury cars while sales of its popular Escape small SUV fell 12% after its new model was recalled for safety problems after hitting dealerships in June. Ford also suffered loss of 3,500 Escapes damaged in a hail storm.
Ford’s bright spot was a 21% jump in sales of the Fusion sedan.
Chrysler posted a sales gain of 13% thanks to strong demand for the Ram pickup and Chrysler 200 sedan. Chrysler is also enjoying increased sales due to its new small cars like the Dodge Dart.
Nissan sales rose 16% thanks to several new models for its Infiniti brand.
Volkswagen’s sales jumped 27% thanks to its aggressive incentives and the appealing new Passat midsize sedan.
Hyundai sales rorse 4% thanks to the popularity of its well-reviewed Elantra sedan.