Car Sales See Big Shift In July

DETROIT (WWJ) - Japanese carmakers came roaring back in July, winning back much of the share that they lost to domestic carmakers in the wake of last year's earthquake and tsunami.

"I think we're seeing a little bit of a reversal of what took place last year," says analyst Jeff Schuster of LMC Automotive.

Honda sales were up 45 percent in July, while Toyota posted a 26 percent sales increase. Nissan and Subaru sales were up 16 percent.

"The recovery, or the bounce back, from the tragedy of last year has been pronounced and, I think, ahead of expectations," said Schuster.

This comes as General Motors posted a six percent sales decline. Ford sales were off four percent.

"Our total sales decline was driven entirely by fleet sales, which were down 16 percent from last year," said Ford sales Vice President Ken Czubay. "That was according to plan."

GM sales operations manager Kurt McNeil says they also planned to let up on fleet sales, which were off fifteen percent. But, he admitted that there were other factors at work in their July sales mix.

"There's no question that the Japanese are coming back full force in the marketplace," he said. "They are being very aggressive."

Chrysler was the one domestic brand to see its sales up on July.

"July was another solid sales month for the Chrysler Group," says Chrysler spokesman Ralph Kisel. "Our July sales were up 13 percent compared with the same month a year ago. So, our streak continues."

That streak has now seen Chrysler post year over year sales increases for 28 consecutive months.

"Some of Chrysler's hike is driven by substantial incentives on key models, like the Chrysler 200 midsize sedan, Chrysler Town & Country minivan and Dodge Journey SUV," says Edmunds.com analyst Michelle Krebs. "That's not a healthy trend for the long-term, but it will keep Chrysler sales buoyed until new product is in the showroom."

The new Dodge Dart compact is off to a strong start, with second month sales roughly triple sales in June.

"We are still in the ramp up mode at our Belvedere Assembly Plant in Illinois," said Chrysler's Ralph Kisiel. "We've added a third shift there, and Dodge Darts should be arriving in dealerships in great numbers this month."

Some analysts say this sales report shows the slowing that's been expected, after a strong first half of 2012.

"It is basically a decent year of recovery," says Jesse Toprak of Trucar.com. "It's not that blockbuster year we anticipated."

Still, Toprak sees an industry that has its fundamentals under control, and will continue to make money on every car that's sold.

Lacy Plache, who's chief economist with Edmunds.com, is more bullish on the auto industry's recovery.

"The bottom line is that pent-up demand for autos is still strong and can be expected to continue to contribute sales, given the aging fleet and the current expansion of credit," she said. "While consumer uncertainty about economic conditions remains a risk for slowing auto sales, July's confidence index increased somewhat, which again indicates a floor to what had been a trend of sagging confidence."

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