Japanese automakers shook off the effects of last year's earthquake to post strong sales in July, compared to their U.S. peers General Motors Company(NYSE:GM) and Ford Motor Company(NYSE:F), U.S. vehicle sales data reported on Wednesday showed.
Toyota Motor Corporation’s (ADR)(NYSE:TM ) July vehicle sales rose 26 percent from a year earlier and Nissan's rose 16 percent. In contrast General Motors' reported a 6 percent fall in sales, and blamed it on a drop in sales to car rental companies. Ford's sales slid 4 percent, dragged down by the Lincoln luxury brand and the Fiesta subcompact.
Get Complete Analysis on The Auto Sector
Sales of Chrysler vehicles rose 13 percent, led by demand for its Ram pick-up and its Chrysler 200 sedans. Volkswagen saw a 27 percent growth in sales on incentives offered.
Preliminary data point to an 11 percent rise in industry sales in July with analysts predicting robust gains for Japanese automakers. There will be more of their cars in showrooms compared to last year, when production was hit due to the earthquake.
Pent-up demand and better financing deals from dealers are expected to be two of the big drivers for growth. There are bank loans available at about three percent and zero interest financing from car companies, who are going all out to attract customers.
How Should Investors Trade The Sector Now Get Free Trend Analysis
In the first half of the year, sales of new cars and trucks ran at an annual pace of just over 14 million, the industry's best performance in five years. Buyers snapped up everything from small cars to pickups, making the industry a bright spot in the economy. The only setback came in May, when sales slowed to a pace of 13.8 million as the stock market dropped. But buyers returned in June and are expected to keep sales strong in July.
Shares of Ford fell 0.87% to $9.11, Toyota Motor Corporation (ADR)(NYSE:TM) rose 0.46% to $76.86 and General Motors Company(NYSE:GM) gained 1.17% to $19.94.