It's been at least three years since there's been such an intense global focus on the health of the U.S. auto industry. In 2009, of course, the question was whether General Motors and Chrysler would survive. Today, the question is: Can U.S. auto sales stay robust enough to ride on top of gathering economic gloom domestically and, in the process, actually help keep the global economy from swooning?
Fiat CEO Sergio Marchionne believes in the prospects of the U.S. auto market enough that he is considering producing more vehicles in Italy for export to the United States. That could help Fiat ease its excess domestic production as the European market slumps while helping U.S. Fiat dealers who are struggling with too few models amid the brand's rocky return to the American market.
June U.S. auto sales data released today underscored why auto executives still exude confidence about the market even as other indicators on the American economy, such as the unemployment rate and overall manufacturing growth, prove increasingly troubling. June auto sales overall were the best in five years and ran at a seasonally adjusted annual rate of more than 14 million units, a pace in line with most forecasts of the full-year sales total, which would be more than 10 percent above last year's total.
In fact, Toyota bumped up its own forecast for 2012 sales to 14.3 million units, which was "quite a jump" from its most recent forecast of 13.5 million units, issued in January, said Bob Carter, general manager of the Toyota Division. And he said that a combination of stable gas prices, pent-up demand and low interest rates "will continue to bring buyers into showrooms."
"As the [U.S.] economy continues to improve, consumer confidence ... spikes and then goes down," Carter told reporters on a conference call. "It's trending in the right direction but there are short-term increases and short-term decreases."
But the main reason that June looked so much better than a year ago was that Japanese brands were back in full-supply mode; a year ago they were at their nadir after the March earthquake and tsunami in Japan. The June tally: Toyota posted a 60-percent increase in U.S. sales over a year ago, Honda 49 percent and Nissan 28 percent.
Other auto brands weren't all that far behind. GM sales rose in June by 16 percent compared with a year ago, Chrysler by 20 percent, and Ford by 7 percent. Volkswagen's U.S. sales were up 34 percent; Hyundai's rose by 8 percent to set a new first-half U.S. sales record and best US June ever for the brand.
Can U.S. car sales put the U.S. economy on its back for a longer haul? June sales pointed to a positive answer.