General Motors Co., Ford Motor Co. and Chrysler Group all posted double-digit sales gain in August as consumers continued to take advantage of low interest rates and favorable lease deals to replace aging cars.
“The industry as a whole continues to experience a robust improvement in demand,” said John Humphrey, senior vice president of the global automotive practice at J.D. Power and Associates. “August is looking to be the best month for retail sales that we’ve seen in the past seven years.”
Consumer spending on new vehicles in August will approach $36 billion, which is the highest level on record, he said
August sales continue to benefit from the housing recovery and consumer confidence, said Elaine Kwei, an analyst at Jefferies, an investment firm.
GM said it sold 275,847 vehicles in the U.S. last month, up 14.7% compared with the same month a year earlier.
“Based on everything we see, the economy is on solid footing, which means the industry should remain strong,” said Kurt McNeil, vice president of GM’s U.S. sales operations.
Ford said it sold 221,270 vehicles in August, a 12.2% increase from the prior year.
[Updated 8:28 a.m.: “This was the best retail of any month for Ford Motor Co. going back to August 2006,” said Ken Czubay, Ford’s vice president of U.S sales and marketing.]
Chrysler Group said it sold 165,552 vehicles in the U.S. last month, a 12% gain from the same month a year earlier.
“Last month we achieved our strongest retail sales in the past 60 months,” said Reid Bigland, Chrysler’s U.S. sales chief.
Six of the automaker’s models set sales records in August.
Toyota Motor Corp. said it sold 231,537 vehicles in the U.S. last month, a 22.8% increase from August a year ago.
“The auto industry continues to be a bright spot in the economic recovery,” said Bill Fay, Toyota division group vice president and general manager.
Nissan Motor Co. said its U.S. sales hit 120,498 vehicles last month, a 22.3% gain and an August record for the Japanese automaker.
Volkswagen said it sold 40,342 VW branded vehicles in the U.S. last month, a 1.6% decline from the prior year.
[Updated 8:28 a.m.: “Volkswagen is unfortunately caught between product cycles on its volume models just as industry sales are taking off,” said Karl Brauer, an analyst at Kelley Blue Book. “This has the brand struggling to make headway against fresher designs in a highly competitive market.”]
Auto price information company TrueCar.com estimated that U.S. auto sales reached 1.5 million vehicles last month, up about 14% from the same month a year earlier.
Part of the gain came from a quirk in the calendar. Some states and local government prohibit car sales on Sundays. Those restrictions resulted in August having one more selling day than the same month a year earlier.
One indication of how strong the retail side of the business was last month is that fleet sales – vehicles sold to rental car companies, governments and big companies – were expected to make up just about 14% of sales, the lowest level since early 2007, said Jessica Caldwell, an analyst with auto information company Edmunds.com.
In part, the decline resulted from the timing of purchases by commercial customers and should reverse in the coming months as more 2014 models roll from the factories of automakers, according to Caldwell.
Overall, car sales are still running at their highest level since early 2007, Caldwell said.