BUSINESS

Fiat Chrysler, Nissan post big US sales gains for June, both boosted by small crossover SUVs

07/01/2015 09:37 EDT | Updated 07/01/2016 05:59 EDT
DETROIT - Nissan's U.S. sales rose more than 13 per cent in June, while Fiat Chrysler posed an 8 per cent gain as the auto industry headed for another healthy sales month.

The Edmunds.com auto website predicts that by the time all automakers report sales on Wednesday, the total will rise about 5 per cent to 1.48 million for the best June since 2006.

Fiat Chrysler was led by the Jeep brand, which posted a 25 per cent sales increase as America's infatuation with SUVs continued. The brand sold almost 5,000 Renegades, a brand-new subcompact SUV. Jeep Cherokee small SUV sales were up 39 per cent.

Nissan was led by its redesigned Rogue small SUV, which posted a 54 per cent increase for a June sales record of more than 23,000.

In all, Fiat Chrysler sold just over 185,000 vehicles compared with 171,000 a year ago. Nissan, including its Infiniti luxury brand, sold just over 124,000 vehicles, compared with nearly 110,000 a year ago.

Buyers have an insatiable demand for new small and midsize SUVs like the Cherokee, Honda HR-V and Ford Edge. Sales of small SUVs were up 11 per cent through May, or more than double the industry-wide sales increase of 4.5 per cent, Kelley Blue Book said. KBB predicted small SUV sales would jump 19 per cent in June.

Demand for SUVs is taking a bite out of car sales. Sales of midsize cars like the Ford Fusion and Toyota Camry have fallen 3 per cent so far this year, and dealers offered promotions in June to clear them off their lots. Kia, for example, was offering zero-per cent financing for up to 66 months and up to $1,500 on Optima and Forte sedans.

Edmunds analyst Jessica Caldwell said subcompact cars are under great pressure as buyers switch to smaller SUVs. Subcompacts, she said, spent an average of 99 days on a dealer lot before selling, 21 days longer than in June of last year.

U.S. auto sales were so strong in the first six months of this year that Kelley Blue Book raised its full-year forecast from 16.9 million vehicles to 17.1 million. U.S. auto sales haven't topped 17 million since 2001.

Lots of factors, including higher employment, low interest rates, a climbing stock market and low gas prices, are boosting auto sales. Automakers are also helping themselves by introducing new vehicles faster and loading them up with desirable features like backup cameras and smartphone compatibility. The average new vehicle cost an estimated $30,452 in June, according to J.D. Power and Associates.

"This is arguably the strongest and healthiest the auto industry has been in a very long time," said Jeff Schuster, a senior vice-president at the forecasting firm LMC Automotive.