While consumer retailers like Wal-Mart recently reported softening sales, the automotive market continues to stay strong. WardsAuto is projecting that the seasonally adjusted annual rate, or SAAR, could top over 16 million units for the month of August. It would be the first month that amount has been hit since November 2007. One of the reasons that the SAAR is surging toward 16 million is due to a very strong report by General Motors this morning. Let's check in on some of the highlights and think about what we can expect in the automotive market for the rest of 2013.
All brands under the GM umbrella turned in double-digit sales gains in August. Cadillac was up 38%, Buick was up 37%, GMC was up 14% and Chevrolet was up 10%. That led to a company-wide increase of nearly 15% to 275,847 units sold compared to last year - the most units sold in the U.S. by any automaker. This is made all the more impressive by the fact that transaction prices continue to increase and incentive spending remains mostly flat.
Full-size pickup and large SUV sales were up 15% and 29%, respectively. Sales for the Silverado topped 43,000 and the GMC Sierra came in at just over 18,000 - both combined couldn't top Ford's F-Series in August. Crosstown rival Ford had a huge month in sales for its F-Series, increasing 22% to top 70,000 units sold for the second time this year. Full-size pickups continue to drive the majority of profits for America's two largest automakers and a strong August will help produce strong earnings for the third quarter.
Finally GM and its investors have reason to cheer the passenger car segment because the redesigned Chevy Impala is such a hit with consumers that retail deliveries increased to 76%. Not to be outdone, retail deliveries of the Chevy Malibu surged an impressive 93%. Those weren't the only cars having success: The Chevy Volt, Spark, Sonic, Cadillac XTS, and Buick Verano all posted their best sales months ever.
What's even better is that GM's retail sales continue to improve while its fleet sales, which are typically less profitable, continue to decline. For the month of August, GM's retail sales were up 22% compared to the drop of 4.9 percentage points in fleet sales compared to last year.
"The second half of 2013 is off to a very solid start for GM and our model-year change over and new product launches are going smoothly," said Kurt McNeil, vice president, U.S. sales operations, in a GM press release. "We have a lot of momentum and we feel good about the direction of the U.S. economy as we prepare to launch even more new products, including all-new heavy duty pickups and large SUVs for Chevrolet and GMC, a completely redesigned Cadillac CTS and the Chevrolet Corvette Stingray."
Let the good times roll
August was the best sales month for GM this year and the best since September 2008. GM looks to keep the momentum building as it continues its largest portfolio refresh in company history. Consider that by 2016 GM will have replaced, refreshed or redesigned 90% of its vehicles - a huge turnaround for what was the industry's oldest vehicle portfolio.
GM's management expects this level of sales to be sustainable in the U.S. as pent-up demand continues to bring consumers into dealerships. Even with automotive sales increasing to their highest levels in nearly five years, it hasn't put a dent in the average age of vehicles, which recently hit 11.4 years, an all-time high. As vehicle sales continue to rebound in the U.S., and GM improves its operations to increase profitability, the company remains a solid investment option at today's price.
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The article GM's Strong August Pushes SAAR towards 16 million originally appeared on Fool.com.Fool contributor Daniel Miller owns shares of Ford and General Motors. The Motley Fool recommends Ford and General Motors. The Motley Fool owns shares of Ford. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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