Sales keep Lordstown plant open

Following another month with huge sales increases for the Lordstown-built Chevy Cruze, General Motors on Thursday canceled plans to idle production for a week this month.

Sales numbers released Thursday show buyers took delivery on 25,447 Cruzes in July, the second-highest sales of any model in the company. The hot-selling small car, up 70 percent over July 2012 sales, was beat only by the Silverado pickup, up 45 percent to 42,080 sales last month.

“They way they are selling, they have to keep up,” said United Auto Workers Local 1112 President Glenn Johnson. He said the announcement came just hours after the month’s sales numbers were released and was directly related to the continued high sales.

The company in recent weeks had announced plans to shut down the plant for a week in late August in order to adjust inventory levels to sales. At the time, Johnson had speculated the company was planning for turnover to the 2014 model year.

Thursday’s announcement of a 70 percent sales increase in July follows the car’s all-time monthly sales record set in June with 32,871 deliveries.

“It speaks volumes for the car and its value,” Johnson said. “I think the awards that it has received have put more consumers in the seat and the opportunity to see what it has to offer.”

The company’s overall small, mini and compact car sales were up 42 percent, GM officials said. The trend was consistent among other automakers.

Honda Civic sales were up 30 percent to 32,416, their best July in 13 years.

Sales of the recently redesigned Ford Fiesta subcompact were up 89 percent. Another subcompact, the Nissan Versa, was up 21 percent.

Part of the frenzy was seasonal. Small cars traditionally sell better in the summer and then taper off as winter approaches. But it’s also an indication of the high level of demand from all kinds of customers, which is likely to remain for the rest of this year.

“We think there’s more room to grow this year,” said Kurt McNeil, GM’s U.S. sales chief, citing improving home values and rising consumer confidence.

GM, Ford, Chrysler, Toyota, Honda and Nissan all reported double-digit sales gains last month. Of major automakers, only Volkswagen had a down month. Its sales were off 3.3 percent as the top-selling Jetta compact faltered.

Honda led the way with a 21 percent sales increase. Toyota and GM both saw sales rise around 16 percent. Chrysler, Nissan and Ford all reported 11 percent gains.

The industry’s numbers for July come a day after the U.S. government reported stronger than expected growth for the April-June quarter. And healthy auto sales are buoying growth in the production of metal parts and components, helping factories expand at the fastest pace in two years, according to the Institute for Supply Management.

The consulting firm LMC Automotive said the second-half tail wind could push this year’s sales to around 16 million. Sales last topped 16 million in 2007, just ahead of the recession. They bottomed out at a 30-year low of 10.4 million in 2009, and have been recovering ever since.

A combination of low interest rates, an improving economy, rising consumer confidence and increasing home values in many areas is driving sales. In addition, automakers have been rolling out appealing new products in every segment from subcompact cars to big pickup trucks.

Incentives such as rebates and low-interest loans are helping sales. Incentives in July rose nearly 8 percent over a year ago to $2,684 per vehicle. That’s the highest level of the year, said Jesse Toprak, senior analyst for the auto pricing site.

Overall, though, the discounts haven’t cut prices. The average sale price of a vehicle last month held steady at just over $31,000, Toprak said. That’s because buyers are loading up on options like leather seats and navigation systems, which boosts the price. To get lower monthly payments while paying a higher price, buyers are stretching out their loans and leasing more vehicles, according to LMC.

Thirty percent of car loans now are six years or longer, up from 29 percent in the first half of last year. Leasing, which generally lowers monthly payments, accounts for 24 percent of auto sales, up from 21 percent a year ago, LMC said.