Pickup trucks led the charge in July, but strong sales of small cars show that demand for new vehicles is broad - and not slowing down.
Car sales on the whole grew in the first six months of this year, but not at the blistering pace of trucks and SUVs. Through June, full-size pickups were up 22.5-percent over the year before, while cars were up just 5-percent.
One of the strong segments in the car category, though, is small cars. In July, sales of smaller cars took off, with General Motors saying its car sales jumped 24-percent, including a 42-percent increase in subcompact and small car sales. Honda Civic sales were up 30-percent to 32,416, the brand's best July in 13 years.
Sales of the recently redesigned Ford Fiesta subcompact were up a whopping 89-percent. Another subcompact, the Nissan Versa, was up 21-percent.
Part of the frenzy was seasonal. Dealers are negotiating hard to clear out excess inventory in preparation of the new model year. Auto companies, too, have over-produced a bit in recent months, and they are dealing to get vehicles off their storage lots before the end of September. Small cars traditionally sell better in the summer and then taper off as winter approaches. But it's also an indication of the high level of demand from all kinds of customers, which is likely to remain for the rest of this year.
"We think there's more room to grow this year," said Kurt McNeil, GM's U.S. sales chief, citing improving home values and rising consumer confidence.
GM, Ford, Chrysler, Toyota, Honda and Nissan all reported double-digit sales gains last month. Of major automakers, only Volkswagen had a down month. Its sales were off 3.3 percent as the top-selling Jetta compact faltered.
Honda led the way with a 21-percent sales increase. Toyota and GM both saw sales rise around 16-percent. Chrysler, Nissan and Ford all reported 11-percent gains.
Most industry analysts estimate that July sales rose around 15-percent from a year ago - the final tally comes out later in the day. A performance that strong will signal that the industry's momentum can carry through December.
"We're almost at a pre-recession pace that looks like it may have the momentum that will carry it through the second half of the year and beyond," said Alec Gutierrez, senior market analyst for Kelley Blue Book.
The industry's numbers for July come a day after the U.S. government reported stronger than expected growth for the April-June quarter. And healthy auto sales are buoying growth in the production of metal parts and components, helping factories expand at the fastest pace in two years, according to the Institute for Supply Management.
The consulting firm LMC Automotive said the second-half tail wind could push this year's sales to around 16 million. Sales last topped 16 million in 2007, just ahead of the recession. They bottomed out at a 30-year low of 10.4 million in 2009, and have been recovering ever since.
A combination of low interest rates, an improving economy, rising consumer confidence and increasing home values in many areas is driving sales. In addition, automakers have been rolling out appealing new products in every segment from subcompact cars to big pickup trucks.
Incentives such as rebates and low-interest loans are helping sales. Incentives in July rose nearly 8- percent over a year ago to $2,684 per vehicle. That's the highest level of the year, said Jesse Toprak, senior analyst for the TrueCar.com auto pricing site.
Overall, though, the discounts haven't cut prices. The average sale price of a vehicle last month held steady at just over $31,000, Toprak said. That's because buyers are loading up on options like leather seats and navigation systems, which boosts the price. To get lower monthly payments while paying a higher price, buyers are stretching out their loans and leasing more vehicles, according to LMC.
Thirty-percent of car loans now are six years or longer, up from 29 percent in the first half of last year. Leasing, which generally lowers monthly payments, accounts for 24-percent of auto sales, up from 21- percent a year ago, LMC said.
Car sales on the whole grew in the first six months of this year, but not at the blistering pace of trucks and SUVs. Through June, full-size pickups were up 22.5-percent over the year before, while cars were up just 5-percent.
One of the strong segments in the car category, though, is small cars. In July, sales of smaller cars took off, with General Motors saying its car sales jumped 24-percent, including a 42-percent increase in subcompact and small car sales. Honda Civic sales were up 30-percent to 32,416, the brand's best July in 13 years.
Sales of the recently redesigned Ford Fiesta subcompact were up a whopping 89-percent. Another subcompact, the Nissan Versa, was up 21-percent.
Part of the frenzy was seasonal. Dealers are negotiating hard to clear out excess inventory in preparation of the new model year. Auto companies, too, have over-produced a bit in recent months, and they are dealing to get vehicles off their storage lots before the end of September. Small cars traditionally sell better in the summer and then taper off as winter approaches. But it's also an indication of the high level of demand from all kinds of customers, which is likely to remain for the rest of this year.
"We think there's more room to grow this year," said Kurt McNeil, GM's U.S. sales chief, citing improving home values and rising consumer confidence.
GM, Ford, Chrysler, Toyota, Honda and Nissan all reported double-digit sales gains last month. Of major automakers, only Volkswagen had a down month. Its sales were off 3.3 percent as the top-selling Jetta compact faltered.
Honda led the way with a 21-percent sales increase. Toyota and GM both saw sales rise around 16-percent. Chrysler, Nissan and Ford all reported 11-percent gains.
Most industry analysts estimate that July sales rose around 15-percent from a year ago - the final tally comes out later in the day. A performance that strong will signal that the industry's momentum can carry through December.
"We're almost at a pre-recession pace that looks like it may have the momentum that will carry it through the second half of the year and beyond," said Alec Gutierrez, senior market analyst for Kelley Blue Book.
The industry's numbers for July come a day after the U.S. government reported stronger than expected growth for the April-June quarter. And healthy auto sales are buoying growth in the production of metal parts and components, helping factories expand at the fastest pace in two years, according to the Institute for Supply Management.
The consulting firm LMC Automotive said the second-half tail wind could push this year's sales to around 16 million. Sales last topped 16 million in 2007, just ahead of the recession. They bottomed out at a 30-year low of 10.4 million in 2009, and have been recovering ever since.
A combination of low interest rates, an improving economy, rising consumer confidence and increasing home values in many areas is driving sales. In addition, automakers have been rolling out appealing new products in every segment from subcompact cars to big pickup trucks.
Incentives such as rebates and low-interest loans are helping sales. Incentives in July rose nearly 8- percent over a year ago to $2,684 per vehicle. That's the highest level of the year, said Jesse Toprak, senior analyst for the TrueCar.com auto pricing site.
Overall, though, the discounts haven't cut prices. The average sale price of a vehicle last month held steady at just over $31,000, Toprak said. That's because buyers are loading up on options like leather seats and navigation systems, which boosts the price. To get lower monthly payments while paying a higher price, buyers are stretching out their loans and leasing more vehicles, according to LMC.
Thirty-percent of car loans now are six years or longer, up from 29 percent in the first half of last year. Leasing, which generally lowers monthly payments, accounts for 24-percent of auto sales, up from 21- percent a year ago, LMC said.
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