The auto industry began the second half of the year with a jolt that totaled more than 1.5 million vehicles sold in July, a 5.3 percent increase from the previous year.þþThe seasonally adjusted annual rate rose to a robust 17.55 million, up more than a million vehicles from 16.48 million a year ago, as growth continued to be led by sport utility vehicles and trucks, often at the expense of traditional sedans.þþGeneral Motors and Fiat Chrysler posted overall increases in sales of about 6 percent compared with the previous year, while sales at Ford rose 5 percent.þþIn particular, Americans are flocking to small crossover S.U.V.s — built on comfortable car frames, with fuel efficiency that can rival their passenger car counterparts, and with prices that put small S.U.V.s in reach of consumers who traditionally were limited to cars.þþ“It’s probably the easiest shift for someone who wants to trade up to an S.U.V. from a sedan,” said Colin Langan, an equity analyst with the investment bank UBS.þþCrossovers of all sizes, as well as pickup trucks, also carry higher profit margins on average than cars, Mr. Langan said, which has helped bolster automakers’ recent strong earnings — especially at the so-called Detroit Three: G.M., Ford and Fiat Chrysler.þþ“It’s had a double benefit for the Detroit Three, because not only are the margins higher, but they also reap the rewards of higher market share because loyalty tends to be higher for these segments,” he said.þþNationwide across all automakers in July, sales of S.U.V.s and trucks outpaced cars, rising nearly 13 percent to more than 840,000 sold, according to the Autodata Corporation. By contrast, car sales nationwide dropped 3 percent, to about 670,000.þþJack Nerad, executive market analyst for Kelley Blue Book, said July’s sales confirmed Americans’ love affair with “tall vehicles,” with higher seating positions and more space. G.M.’s small Buick Encore crossover charged forward for a 68 percent sales gain in July compared with last year. Its slightly larger sibling, the Enclave, was up 25 percent, while the Chevrolet Traverse posted a 32 percent gain.þþS.U.V.s also powered Ford’s gains in July, with nearly its entire lineup posting double-digit growth. The Ford Explorer was up 23 percent, the Edge up 17 percent and the Escape up 10 percent.þþAt Fiat Chrysler, the story was similar, as the Jeep brand led the way with a 23 percent overall increase. The company made gains despite a record fine from federal regulators last month for failing to properly address numerous safety recalls, the most prominent involving a Jeep model.þþCompact crossover S.U.V.s are selling quickly once they arrive at dealerships, according to data from the auto research site Edmunds.com. Consumers are snapping them up after only 42 days, faster than nearly every other category of vehicle. By contrast, subcompact cars languished for 94 days, compact cars for 63 days and large cars for 82 days.þþ“The trucks and sport utilities of today are not what they were 10 years ago,” said Michelle Krebs, a senior analyst for AutoTrader.com. “They’re far more fuel efficient and carlike.”þþThe most truck-like S.U.V.s, the largest offerings, which are still built on more rigid truck frames, lost ground in July. G.M., which dominates the segment, had its Yukon sales drop 14 percent, the Yukon XL fall 43 percent and Chevrolet Suburban slip 17 percent. Even the high-end Cadillac Escalade struggled in July, dropping 32 percent.þþSuch vehicles are among the most profitable in G.M.’s lineup and have done well over the last year, though Stephanie Brinley, senior analyst at IHS Automotive, warned that “the appetite for full-size-pickup-based S.U.V.s does seem to be declining.” Sales of Ford’s largest S.U.V., the Expedition, also fell in July.þþBut S.U.V.s and crossovers as a whole, across all sizes, continue to win over consumers and gain market share from traditional cars. IHS Automotive data shows that such vehicles now compose more than a third of the entire light vehicle market in the United States — their highest share in at least six years.þþAnother bright spot for automakers last month was pickup trucks, whose sales continue to grow as the American housing market recovers (pickups are popular with construction contractors), and consumers with older trucks trade them in for new ones.þþFord’s F-series trucks, vital to the company’s overall performance, jumped nearly 5 percent in July — the first year-over-year growth since January. The redesigned F-150 pickup with a mostly aluminum body ran into production delays this year, and Ford is counting on sales of the truck to increase in the late summer and early fall as dealers get fully stocked up on the new vehicle.þþFiat Chrysler’s Ram pickups struggled, however, posting essentially flat performance in July, up 1 percent.þþElsewhere around the industry, sales at Honda and Nissan both rose almost 8 percent for the month, Subaru was up nearly 11 percent and Toyota rose slightly at under 1 percent. The Volkswagen Group posted 9 percent gains, and Hyundai rose 6 percent.
Source: NY Times
