ford 
Paul A. Eisenstein
The Detroit Bureau
21 hours ago
Toby Talbot / AP
In this Monday, July 29, 2013, photo, a Chrysler 300 sits on the lot of Midstate Motors in Berlin, Vt. Chrysler, Ford and GM all reported a big jump in auto sales in July.
As the U.S. auto industry continues to roar back from the worst recession in more than half a century, car sales appear to have surged to their highest July total since 2006, automakers reported Thursday.
If anything, supply shortages and new model delays could be the only thing holding the market back from an even bigger upturn, industry officials warned, Ford and Hyundai among the makers stretching the limits of their production capacity while Chrysler bangs away at problems with the new Jeep Cherokee model it hopes to launch next month.
There are few makers that didn?t score gains during July, with industry analysts estimating that overall year-over-year sales numbers will wind up at least 15 percent ahead once the last few manufacturers weigh in. Detroit makers all posted double-digit increases, as did the Japanese Big Three ? though Nissan?s surge was tempered by a nearly one-third drop in sales by its Infiniti luxury brand.
(Read more: Chrysler Earnings Surge 16 percent, Helps Bail Out Italian Partner Fiat)
Why is the market continuing to heat up? Analysts point to a wide variety of factors including looser credit, a big surge in the housing market that is buoying demand for full-size pickups, growth in small car and hybrid sales as consumers prepare for future fuel price hikes and, perhaps most important, improving confidence in a slow-growing economy.
?Consumer confidence ? maintained elevated levels as evidenced by strong retail sales,? said Bill Fay, the group vice president of the Toyota division. Toyota and its Lexus and Scion brands were up 16.5 percent year-over-year.
(Read more: Gas up the Ford F-150 truck! That's gas, as in gas...)
JONATHAN ERNST / Reuters
New vehicles at Koons Ford dealership in Fairfax, Virginia, July 24, 2013. Ford, GM and Chrysler reported a big jump in July sales
Echoing Fay, many industry observers said one of the most encouraging factors in the July numbers was the fact that retail sales are outpacing fleet demand. General Motors, for example, posted an overall gain of 16 percent for the month ? but its retail volume surged 23 percent.
Strong demand for pickups was another factor, as Ford found. The second-largest domestic maker was up 11 percent for July but its F-Series gained 23 percent. And it wasn?t alone.
?We continue to see strong retail sales, particularly with our pickup trucks and SUVs, and that has helped to propel Chrysler Group to our 40th consecutive month of year-over-year sales growth,? said Reid Bigland, head of the maker?s Ram truck brand as well as its U.S. sales chief, as he responded to Chrysler?s 11 percent gain.
But while high-profit trucks might be fueling the improved finances of Detroit?s makers, domestics and foreign brands alike also saw sharp increases in demand for fuel-efficient small cars and hybrids. Ford?s subcompact Fiesta model gained 89 percent for the month.
If anything, Ford is struggling to meet demand in the recovering U.S. market. It plans to add production of its popular Fusion midsize sedan later this year at a plant in Flat Rock, Michigan, for example. And it?s not alone. Hyundai has warned that while 2013 sales are on track for another all-time record its market share will likely slip because of capacity restraints on products like the compact Elantra. Sibling Korean carmaker Kia is facing similar challenges.
Meanwhile, Chrysler is struggling to get its Jeep brand back in the black as it prepares for the long-awaited launch of the 2014 Grand Cherokee update and the introduction of the all-new Cherokee model.
"Solid industry sales in July point to a stable market indicating a recovering economy,? said Bill Fay, Toyota division group vice president and general manager.
A number of analysts and industry planners have lately upgraded their sales forecasts for the full year to around 15.5 million. July?s numbers, when converted to a seasonally-adjusted basis, appear to have come in around 15.8 million.
American Honda Motor Co., Inc. reported a monthly increase of 20.9 percent compared with July 2012, its Civic model setting an all-time record. And while Nissan may wind up lagging the overall torrid July pace, with a 10.9 percent increase, it nonetheless reported record sales for its namesake brand. The Nissan marque surged 16.8 percent but the Highline Infiniti brand slid 33.2? percent as it waited to begin the roll-out of its new Q50 model ? which replaced the marque?s top-selling G series.
Mercedes-Benz reported July sales jumped 18.5 percent, as year-to-date sales hit an all-time high of 165,598 units. This makes July the seventh consecutive month of record-breaking sales. German rival BMW ? which includes sales of the British Mini brand ? gained 10.5 percent for the month.
?July is a pivotal month, setting the trend for the second half of the year and the numbers show the trend is with us,? said Ludwig Willisch, President and CEO, BMW of North America, LLC.
After several years of solid growth, Volkswagen sales have been slowing since early spring and the maker reported a modest 3.3 percent jump for July. But officials said they look to new product to rebuild momentum later this year.
Even with stronger levels of consumer confidence, analysts say the automotive recovery would not be taking root without improved credit availability.
?Elevated new vehicle transaction prices are being enabled by the availability of longer-term loans, affordable leases and strong used vehicle values, compounded by the availability of low- interest rates,? wrote John Humphrey, senior vice president of the global automotive practice at J.D. Power.
As for those higher transaction prices, Kelly Blue Book estimated the typical new vehicle rolling off U.S. dealer lots cost $31,795 last month, a 2.0 percent increase from July 2012.
Joe Szczesny contributed to this report.
Copyright ? 2009-2013, The Detroit Bureau
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