U.S. Auto Sees Best August in 5 Yrs - Analyst Blog

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Light vehicle sales in the U.S. in August improved 19.9% to 1.29 million vehicles, which is the highest monthly figure for any August since 2007. According to Autodata Corp., seasonally adjusted annual rate (SAAR) during the month was 14.52 million vehicles, up 16% from the year-ago level.

The key factors that drove auto sales during the month include easier credit terms and strong pent-up demand. Most of the major automakers posted double-digit rise in sales. Let us take a look at each of them one by one.

U.S. Automakers

General Motors Company ( GM ) sales rose 10.1% to 240,520 vehicles driven by strong demand for cars and trucks. Higher gasoline prices boosted sales of compact cars including the Cruze.
 
Ford Motor Co. ( F ) sales grew 12.6% to 197,249 vehicles, mainly driven by strong demand for its Escape sports utility vehicles (SUVs) and F-Series pickup truck. Sales of Escape surged 36.8% to 28,188 units while that of F-series jumped 19.3% to 58,201 units.

Chrysler Group LLC - controlled by Italy's Fiat SpA ( FIATY ) - saw its best August in five years with sales of 148,472 vehicles, up 14% from the year ago level. The company's truck sales grew 12% while car sales went up 21% during the month.

Japanese Automakers

Toyota Motor Corp. ( TM ) posted an impressive 45.6% jump in sales to 188,520 vehicles, driven by strong demand for its cars, pickup trucks and SUVs. Sales of vehicles such as Rav4 SUV and Prius hybrid more than doubled during the month.

Honda Motor Co. ( HMC ) sales shot up 59.5% to 131,321 vehicles during the month. The company's strong sales growth can be attributable to impressive sales of Acura (up 73%) and Accord (up 89%).
 
Nissan Motors Co. ( NSANY ) saw a modest 7.6% rise in sales to 98,515 vehicles. Sales in the company's Nissan Division sales increased 5.9% to 87,360 units while that in the Infiniti division grew 23.6% to 11,155 units.

Other Automakers

Daimler AG 's ( DDAIF ) Mercedes-Benz sales scaled up 11.3% to 20,557 units.  This compared with the global sales growth of 4.5% to 97,337 units due to higher demand for B-Class models.

Volkswagen AG ( VLKAY ) sales jumped 62.5% to 41,011 vehicles, making the best August sales since 1973. The improvement in sales was largely driven by strong sales of Passat sedans, which increased to 10,090 units from 314 a year earlier.

Hyundai Motor Co. ( HYMLF ) sales grew a tad 4% to 61,099 vehicles due to supply constraints. Meanwhile, sales of its sister company Kia Motors Corp went up 21.5% to 50,028 vehicles.

Outlook

Strong pent-up demand and improving macroeconomic conditions in the U.S. will continue to revive the industry from recessionary lows, partially offset by the backlash from the economic crisis in Europe.

Average age of vehicles on the U.S. road is 10.8 years. The replacement rate is expected to remain solid till 2013. GM anticipates sales in the range of 14 million to 14.5 million vehicles for full year 2012.


 
DAIMLER AG (DDAIF): Free Stock Analysis Report
 
FORD MOTOR CO (F): Free Stock Analysis Report
 
FIAT SPA (FIATY): Free Stock Analysis Report
 
GENERAL MOTORS (GM): Free Stock Analysis Report
 
HONDA MOTOR (HMC): Free Stock Analysis Report
 
(HYMLF): ETF Research Reports
 
NISSAN ADR (NSANY): Free Stock Analysis Report
 
TOYOTA MOTOR CP (TM): Free Stock Analysis Report
 
(VLKAY): ETF Research Reports
 
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Business , Stocks

Referenced Stocks: DDAIF , F , FIATY , GM , HMC

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