GM, Ford show stronger sales, US auto industry recovers

US new automobile sales in June almost recorded their strongest month in more than five and a half years as factory orders posted a second straight month of gains indicating a stabilizing in economy.

Home prices posted their biggest annual increase in more than seven years in May, adding to the improving economic picture, and strengthening concerns of Feds bond-purchasing program to be reduced as soon as the end of the year. The economy seems to be showing some positive signs after slowing early in the second quarter as the effects of cooling global demand and tighter fiscal policy took hold.

“We are in a transition stage of the economic recovery, moving away from exports and government to private domestic demand, which would make this recovery sustainable,” said Brett Ryan, an economist at Deutsche Bank in New York. “We have been surprised how well the American consumers have weathered the storm from the end of the payroll tax holiday.” he added cited by Reuters.

General Motors Co. and Ford Motor Co. reported stronger-than-expected sales, and Chrysler Groups sales were in line with expectations. Toyota Motor Corp also reported strong U.S. sales.
Better than expected sales are being driven by demand for pickups, because of the strengthening housing recovery. Furthermore, half of the large pickup trucks on U.S. roads are more than 11 years old, according to manufacturers. The replacement of old vehicles is driving up demand.

“Consumers are excited about the housing market as well. Everything is lining up for good, healthy auto sales for the remainder of the year,” said Fred Diaz, the head of U.S. sales for Nissan Motor Co cited by Reuters.

Bayerische Motoren Werke AG, or BMW increased U.S. sales of its 3 Series cars by 63% last month, narrowing the luxury-vehicle lead of Daimler AG’s Mercedes-Benz. Deliveries of the BMW brand rose 25% in June while Mercedes reported a 9.8% gain from a year earlier, according to statements yesterday. Toyota Motor Corp.’s Lexus posted a smaller 6.7% increase.

It’s part of a prevailing trend of near-luxury sales overall,” Gutierrez, who is based in Irvine, California, said in an interview for Bloomberg yesterday. “The available lease offers on 3 Series has been a pretty significant driver, too. We’ve seen promotions from the low- to mid-$300s a month. Even the 335 can be had for $400 a month. That’s a lot of car for $400 a month.”

BMW’s stands as a luxury cars leader of 2012 based on reported sales. By vehicle registrations, Mercedes topped BMW last year, according to researcher R.L. Polk & Co.