US auto sales strong in July on SUV, luxury demand

DETROIT (AP) – American drivers want to get noticed again.

SUVs and luxury vehicles are selling fast, defying recession-era predictions that Americans would downsize and stop flaunting their wealth. Luxury sales were up 10 percent in the first six months of this year; in the same time period, mass-market vehicle sales rose just 3 percent, according to car shopping site TrueCar.com.

That demand drove July’s strong U.S. vehicle sales. Sales of new cars and trucks were expected to rise 3 percent to nearly 1.5 million.

General Motors and Fiat Chrysler both saw 6 percent sales gains over last July, while Honda and Nissan saw 8 percent gains. Ford’s U.S. sales rose 5 percent. Volkswagen sales rose 2 percent. Toyota’s sales were flat, hurt by a big dip in car sales.

Other automakers will report sales later Monday.

Automakers benefited from relatively low gas prices and surging sales of SUVs. Sales of Nissan’s new Rogue jumped 51 percent, while sales of GM’s Buick Encore jumped 68 percent.

Summer discounts to clear out 2015 models also lured buyers. Sales of midsize sedans have been struggling as Americans pass them over for small SUVs, so automakers enticed buyers with zero-percent financing deals on the Toyota Camry, Ford Fusion, Nissan Altima and other sedans. It worked. Altima sales rose 27 percent and set a new July record.

Another big motivator: status. Luxury brands made up 11.5 percent of vehicles purchased so far this year, up from 10.2 percent three years ago, according to TrueCar.

Audi saw its best July ever in the U.S., with sales up 21 percent to more than 17,500 cars and SUVs. Lincoln’s sales jumped 21 percent; the brand sold 785 Lincoln Navigator SUVs, or 25 per day, at more than $62,000 apiece. Acura and Infiniti sales both climbed 20 percent.

Luxury brand sales have been growing faster than mass-market ones since 2013, but the pace is accelerating for several reasons, says Larry Dominique, TrueCar’s executive vice president.

Luxury automakers are adding more models at lower prices, which is attracting new buyers. Mercedes’ CLA sedan, introduced in 2013, starts at $31,500, while Lexus has a new small SUV, the NX, that starts at $34,480. That’s within reach of younger buyers. Dominique said Millennials are now leasing luxury cars at a higher rate than other generations.

Dominique said that before the recession, when housing values were high, the industry believed luxury sales were inflated because people were borrowing against their home values. But that wasn’t the case. After the recession, luxury sales took off even before home values had recovered.

“People who buy luxury want luxury. It’s a cultural phenomenon,” Dominique said.

Increases in the stock market have fueled luxury sales. Low interest rates have also helped some luxury buyers lower their monthly lease or loan payments.

Here are more details, by automaker:

– GM’s sales rose 6 percent to 272,512. Buick sales jumped 18 percent, but Cadillac sales were down. GMC and Chevrolet sales were up thanks to demand for trucks. Chevrolet Silverado pickup truck sales were up 34 percent in July.

– Ford’s sales were up 5 percent to 222,731. F-Series pickup sales, which had been down due to lack of inventory as a new truck went into production, were up 5 percent. But Ford’s car sales fell 4 percent.

– Toyota’s sales were up less than 1 percent to 217,181. Sales of the Tacoma small pickup jumped 29 percent, while Lexus SUV sales were up 28 percent thanks to the new NX small SUV. But car sales were down. Prius hybrid sales dropped 13 percent.

– Fiat Chrysler’s sales rose 6 percent to 178,027. Jeep sales increased 23 percent and Ram sales rose 1 percent, but Dodge and Fiat sales were down.

– Honda’s sales rose 8 percent to 146,324. Honda’s SUV and truck sales jumped 13 percent, led by the CR-V SUV and the Odyssey minivan. Honda’s car sales were up 3 percent.

– Nissan’s sales rose nearly 8 percent to 130,872. Nissan said sales of its trucks and SUVs set a new July record, but low gas prices took a toll on the electric Nissan Leaf, which saw sales drop 61 percent.

– Volkswagen’s sales rose 2.4 percent to 31,300 vehicles. Sales of the new Golf and Jetta sedans more than doubled over last July.