* U.S. car sales climb to 14.5 mln annual rate in first half
* Stronger-than-expected June sales, up 22 percent
* Projected 2012 sales best in 5 years
By Bernie Woodall and Ben Klayman
July 3 U.S. new auto sales in June raced past
expectations on lower gas prices and still-generous incentives,
and are on track to score their best year since 2007.
The surprisingly strong June in which sales rose 22 percent
from a year ago helped ease fears that weaker-than-expected
results in May would suggest a slowdown in demand.
June's annualized sales rate of 14.1 million vehicles,
according to Autodata Corp, beat analysts' average estimate of
Before the U.S. economy sank into recession, annual auto
sales tallied 16.1 million in 2007. They plunged to 13.2 million
in 2008 and a 27-year low of 10.4 million in 2009, before
beginning a slow recovery. Last year, U.S. auto sales totaled
Shares of General Motors Co jumped more than 6
percent on Tuesday as the No. 1 U.S. auto maker posted a 16
percent increase in vehicle sales from the previous year and
said June was its best performing month since September 2008.
Sales by Ford Motor Co, the second-largest U.S. automaker,
climbed 7 percent and its shares rose 3 percent.
Of the major automakers reporting U.S. sales on Tuesday,
Toyota Motor Corp posted a 60 percent gain, to
177,795, that still fell short of analysts' expectations. The
strong rebound by the third-biggest automaker based on U.S.
sales followed a low point after the Japanese earthquake and
tsunami last year.
Sales of industry No. 4 Chrysler rose 20 percent to 144,811
vehicles, slightly topping analyst expectations. It was the 27th
consecutive month that Chrysler sales topped those from the
previous year, and its best June sales since 2007.
No. 5 Honda Motor Co fell just short of several
analysts' targets, while posting a 49 percent hike in June
sales, to 124,808.
Auto sales are an early sign of consumer spending and have
been one of the bright spots in the U.S. economy for much of the
year, although they trailed analysts' expectations in May, when
the annual pace was around 13.7 million.
On average, analysts surveyed by Reuters had expected a 13.9
million annualized sales rate in June.
In the first half of 2012, some 7.27 million new cars and
trucks were sold in the United States, indicating full-year
sales of 14.5 million.
Deteriorating European markets have led industry executives
to worry about possible contagion spreading to North America. On
Monday, data from the Institute for Supply Management showed
U.S. manufacturing shrank in June for the first time in nearly
three years, a sign of a slowdown in the economic recovery.
Ford chief economist Ellen Hughes-Cromwick said falling gas
prices are "acting like a tax cut for consumers (and) helping to
boost discretionary incomes for households.
GM said its vehicle sales in June totaled 248,750. All four
of GM's U.S. brands - Buick, Cadillac, Chevrolet and GMC -
showed sales increases for the month.
Michelle Krebs, senior analyst with Edmunds.com, said sales
were underpinned by pent-up demand. She said buyers were
encouraged by low interest rates, merchandising promotions such
as zero-interest loan offers and price incentives.
Ford U.S. sales chief Ken Czubay said sales markedly gained
strength in the last 7 to 10 days of the month. He said those
sales will not detract from July's figures.
Ford sales climbed to 207,759 vehicles, according to the
automaker, with strong sales of sedans, utility vehicles and
Hyundai Motor Co and its affiliate Kia Motors
Corp had combined U.S. sales of 115,139 vehicles in
June, up 10 percent from a year ago. Each brand set company a
record for that month.
Nissan showed a 28 percent sales gain, to 92,237 new
vehicles. The Nissan brand had record June sales of 81,801, up
25 percent, while the luxury Infiniti brand showed a 66 percent
sales rise to 10,436.
Bill Fox, owner of four dealerships in upstate New York that
sell Chrysler, Toyota, Honda and Subaru brands, as well as GM's
Chevrolet, said the sales increase in his area can be linked
mainly to aging cars.
"With the recessions of '08, 09 and into '10, people stayed
out of the market," said Fox. "Up here, we are Rust Belt - we
don't have people with lots of discretionary income buying BMWs
up here. People who buy cars are doing so because their old ones
"Consumers are very much on edge about the economy and their
jobs, but they still need a new car when their old one has
150,000 miles on it."