September 3, 2014 at 1:00 am

August vehicle sales best in a decade as Chrysler leads pack

The new Jeep Cherokee had its highest sales since launch with 18,674 moving off dealer lots in August. (Charles V. Tines / The Detroit News)

Customers flocked to dealerships last month and bought the most cars, SUVs and trucks of any August for more than a decade, handily beating analysts’ estimates that had called for flat sales.

Automakers sold nearly 1.59 million cars in the U.S. last month — the most since August 2003 — as sales increased 5.5 percent from the same month a year ago. Buyers turned out for Labor Day weekend sales and hard-to-beat financing and lease deals last month.

The annualized pace of sales hit 17.53 million, the highest since January 2006, according to Autodata Corp.

“The early Labor Day really pumped up a lot of activity,” John Felice, Ford vice president of U.S. marketing, sales and service, said in a call Wednesday. “August started solid, remained solid and closed very strong.”

Chrysler Group LLC led the way in results released Wednesday with a huge sales increase in August, up 19.8 percent to 198,379 vehicles. Ford Motor Co. sales rose 0.4 percent to 221,373, while General Motors Co. recorded a 1.2 percent sales decline.

Chrysler’s and Ford’s gains surpassed analysts’ estimates; GM’s sales drop was in line with predictions. Most of the forecasters expected sales to be similar to the same month a year ago because August had one fewer selling day than August 2013.

Consumers increasingly hit dealerships late in August. With low gas prices, zero-percent financing for 72 months and cheap lease specials, they bought SUVs of all sizes and full-size trucks. Crossovers and small SUVs remained hot as consumers scooped up a record 35,600 Toyota RAV4 small SUVs; Chrysler’s Jeep brand posted its best month yet for the new Cherokee SUV. Brisk sales of SUVs and trucks, in turn, meant that automakers offered some great deals to keep small and midsize cars moving.

Ram pickup sales exceeded 43,000; that’s up a whopping 32.6 percent from a year ago, and the best August for the brand since 2003. Chevy Silverado and GMC Sierra pickups sales rose 12.8 percent and 10.2 percent, respectively. And for the first time since February 2013, combined sales of the Silverado and Sierra topped Ford’s F-Series pickups. Ford’s F-Series trucks fell 4 percent as the automaker manages inventory levels in anticipation of the 2015 F-150 later this year.

Ford expects demand for pickups and small sport-utilities will continue through the rest of the year, said Felice and Erich Merkle, Ford’s sales analyst, in a call with analysts and reporters.

“The consumer is starting to feel better about the economy,” said Jeff Schuster, an analyst with researcher LMC Automotive in Southfield. “People are looking at low gas prices and saying, ‘Maybe I will buy that truck or SUV.’ ”

Ford eked out an overall sales gain for the month with a 19.5 percent increase for Fusions and an 8.5 percent jump in Escape sales. Explorer sales increased 25.4 percent, marking the best August for the SUV since 2004.

Toyota Motor Sales USA Inc.’s U.S. sales hit a record August with sales that rose 6.3 percent. Bill Fay, Toyota division group vice president and general manager, said the carmaker will add production of the Highlander SUV to meet demand.

“We’re going to close out the year with the highest production plan we’ve had in seven years,” Fay said. “Consumer confidence is up, spending growth is out there in the marketplace, interest rates are stable, fuel prices are stable. It’s pretty much ... close to (the) perfect situation out there in the economy that continues to support our industry.”

Chrysler’s Jeep brand posted a 48.7 percent gain as the new Cherokee had its best month since its introduction; 18,674 moving off dealer lots. Fiat and Dodge brand sales were down year-over-year; Chrysler brand sales rose 3.8 percent.

GM’s sales totaled 272,423 for the month; they were down 1.2 percent compared with August 2013, which was the Detroit automaker’s best sales month of last year. The carmaker said its retail sales to consumers fell 4 percent in August, though sales to fleet customers were up 9 percent. GMC brand sales rose 10.4 percent in August, while the Buick, Cadillac and Chevrolet brands all posted year-over-year sales declines.

“We see a strong fall selling season ahead for GM and the industry, which sets the stage for the launches of the Chevrolet Colorado and GMC Canyon,” Kurt McNeil, GM’s U.S. vice president of sales operations, said in a statement. “Car-buying fundamentals like employment and energy prices are in good shape, consumer confidence has reached a post-recession high and business investment is increasing.”

Michelle Krebs, a senior analyst for research site AutoTrader.com, doesn’t think GM’s record recalls this year had any impact on GM’s August sales. Instead, she pointed to Cadillac, whose division sales fell 17.8 percent from a year ago.

“They just aren’t performing that well,” she said.

GM may have lost some sales to other automakers that offered sweeter incentives in certain segments. However, GM posted its highest average transaction prices in company history at about $33,750 a vehicle.

Edmunds.com senior analyst Jessica Caldwell said in an interview there likely was some pull-ahead of sales last month, and that the sales pace could fall off a bit in the months ahead.

Alec Gutierrez, a senior analyst for Kelley Blue Book, said good economic fundamentals will continue to help drive strong sales in the coming months, though he expects sales for September and October to fall back slightly from August’s big number.

“There’s always a slowdown after the Labor Day sales weekend,” he said.

mburden@detroitnews.com
(313) 222-2319
Twitter.com/MBurden
Staff Writer Michael Martinez and Bloomberg News contributed.