Millennials join confident consumers snapping up autos in U.S.

SOUTHFIELD, Mich. - Surprising U.S. sales gains from the Detroit Three and top Japanese automakers provide another sign that the American consumer is back and ready to spend.

With the six biggest sellers of autos in the U.S. all increasing volumes and beating estimates last month, the industry is flirting with sales levels not seen in 10 years or more. Americans are buying pricey sport utility vehicles and pickups with luxury cabins, adding to the economy's momentum as gasoline and financing are both relatively affordable.

Consumer confidence is solidly in pre-recession territory, which has inspired consumers to start trading in their old rides. Millennials are piling into the market, too, said Larry Dominique, executive vice president for car-pricing website TrueCar Inc., so the sales results are no fluke.

"A lot of people are buying because they have confidence in the economy and need to replace their cars," Dominique said. "Millennials are coming to market pretty fervently."

While consumer confidence slipped a bit in July, the eight- month average is the highest since 2004, according to University of Michigan Surveys of Consumers.

General Motors sales rose 6.4 percent, beating projections for a 0.6 percent improvement, and Ford's light-vehicle deliveries rose 5 percent, topping estimates for a 1.8 percent gain. The North American unit of Fiat Chrysler Automobiles NV has grown now for 64 straight months, delivering 178,027 vehicles in the U.S. last month. Its 6.2 percent gain exceeded the 4.8 percent average estimate.

Nissan's U.S. auto sales rose 7.8 percent, beating the average estimate for a 5.3 percent gain. Toyota reported a 0.6 percent gain, compared with estimates for a 0.1 percent decline from a year earlier, and Honda's 7.7 percent increase topped projections for a 4.7 percent gain.

Auto sales momentum should carry forward for 18 months, according to Mark Wakefield, a Southfield, Michigan-based consultant with AlixPartners. He said he expects carmakers to sell 17.1 million cars and light trucks this year and 17.4 million next year.

Sales growth is being driven by "the economic recovery, vehicle affordability and more employment," he said in a phone interview.

"Strong demand for crossovers such as Rogue and Murano drove Nissan's overall light-truck sales up 22 percent and set a July record for the company," said Fred Diaz, senior vice president, U.S. sales and marketing and operations.

Japan's second-largest automaker by global sales reported July records for the company and for the Nissan brand, which reported sales of crossovers, trucks and sport utility vehicles rose 22 percent. Sales of its luxury Infiniti brand rose 22 percent to 10,433, powered by a 68 percent rise in QX60 SUV sales.

Total light vehicle sales and the annualized rate adjusted for seasonal trends far exceeded estimates.

Deliveries totaled 1.51 million cars and light trucks last month, according to Autodata Corp., topping the 1.48 million average analyst prediction. The selling pace accelerated to 17.6 million from 16.5 million a year earlier. The average estimate was for a rate of 17.2 million.

The fastest pace in the Bloomberg survey was for 17.3 million, predicted by Patrick Archambault of Goldman Sachs and Chris Hopson of IHS Automotive.

"Analysts are playing it very conservatively, and we are beginning to consistently see these automakers strongly beat estimates," said Michelle Krebs, an analyst with AutoTrader.com. "There are definitely some economics involved with these strong numbers, such as employment having improved. Again, the story is the same. People are going after SUVs and crossovers."

Combined sales of Volkswagen and Audi brands also beat estimates: rising 8.4 percent to 48,954, compared with projections for a 3.6 percent increase.

Deliveries for Seoul-based affiliates Hyundai and Kia totaled 127,324. Their combined 6.7 percent increase topped the 1.7 percent average estimate.

GM and Ford are benefiting from a surge in pickup sales that should continue because many contractors and other owners are driving well-worn models that need to be replaced.

"There's a lot more room for pickup-truck growth; most pickups on the road are old," said Krebs.

For Fiat Chrysler, deliveries of the Chrysler 200 almost doubled to 15,108, helping the three-vehicle Chrysler brand to a 9.7 percent gain for the month. It was the 200's 11th straight monthly sales record. Jeep brand sales jumped 23 percent for its best July ever, as all models posted increases, led by the Wrangler and Cherokee. Ram pickups rose 1.1 percent to 36,019. The small gain delivered the line's best July in 10 years.

Fiat Chrysler's sales-gain streak dates to the 2009 exit from bankruptcy of the automaker formerly known as Chrysler.

• Contributors: Patrick Ralph in New York and Jeff Green in Southfield, Michigan.