American drivers want to get noticed again.
SUVs and luxury vehicles are selling fast, defying recession-era predictions that Americans would downsize and stop flaunting their wealth. Luxury sales were up 10 percent in the first six months of this year; in the same time period, mass-market vehicle sales rose just 3 percent, according to car shopping site TrueCar.com.
Audi saw its best July ever in the U.S., with sales up 21 percent to more than 17,500 cars and SUVs. Lincoln's sales jumped 21 percent; the brand sold 785 Lincoln Navigator SUVs, or 25 per day, at more than $62,000 apiece. Acura and Infiniti sales both climbed 20 percent.
Luxury brand sales have been growing faster than mass-market ones since 2013, but the pace is accelerating for several reasons, says Larry Dominique, TrueCar's executive vice president.
Luxury automakers are adding more models at lower prices, which is attracting new buyers. Mercedes' CLA sedan, introduced in 2013, starts at $31,500, while Lexus has a new small SUV, the NX, that starts at $34,480. That's within reach of younger buyers. Dominique said Millennials are now leasing luxury cars at a higher rate than other generations.
Dominique said that before the recession, when housing values were high, the industry believed luxury sales were inflated because people were borrowing against their home values. But that wasn't the case. After the recession, luxury sales took off even before home values had recovered.
"People who buy luxury want luxury. It's a cultural phenomenon," Dominique said.
Increases in the stock market have fueled luxury sales. Low interest rates have also helped some luxury buyers lower their monthly lease or loan payments.
Sales of Ford's Lincoln luxury brand jumped 21 percent in July. The brand sold 785 Lincoln Navigators; that's 25 per day at more than $62,000 apiece. Sales of Nissan's luxury Infiniti brand climbed 22 percent on demand for the QX60 SUV and the new Q70 sedan.
That demand drove July's strong U.S. vehicle sales. Sales of new cars and trucks were expected to rise 3 percent to nearly 1.5 million.
Despite the strength of luxury sales, the maligned minivan segment was the sales winner in July, posting an 8.5 percent increase from last year, according to Kelley Blue Book.
Consumers continue to pay top doller, with the average transaction price(ATP) estimated at $33,453 in July 2015. That's similar to the June average but is a 2.6 percent uptick from July 2014, according to Kelley Blue Book.
Nissan reported the largest ATP increase with prices up nearly 6 percent, "driven primarily by its Maxima, Murano, Rogue and Sentra models," KBB said in a statement.
General Motors and Fiat Chrysler both saw 6 percent sales gains over last July, while Honda and Nissan both saw 8-percent gains. Ford's U.S. sales rose 5 percent. Volkswagen sales rose 2 percent. Toyota's sales were flat, hurt by a big dip in car sales.
Automakers benefited from relatively low gas prices and surging sales of SUVs. Sales of Nissan's new Rogue jumped 51 percent. Ford's Escape, Edge and Explorer SUVs all saw double-digit percentage gains. Sales of GM's Buick Encore small SUV jumped 68 percent.
Summer discounts to clear out 2015 models also lured buyers. Sales of midsize sedans have been struggling as buyers pass them over for small SUVs, so automakers tried to entice buyers last month with zero-percent financing deals on the Toyota Camry, Ford Fusion and Nissan Altima. It worked. Altima sales rose 27 percent and set a new July record.
Several factors contribute to the overall increase in demand, including pent-up demand from Americans, who have been holding onto their cars for 11.5 years, on average.
"This combination of demand, stable economic indicators, low gas prices, low interest rates and compelling new product is driving the strongest car market we’ve seen since the Great Recession, while creating the potential for record-breaking volume this year and next,” Karl Brauer, senior analyst for KBB, said in a statement.
Here are more details, by automaker:
— GM's sales rose 6 percent to 272,512. Buick sales jumped 18 percent, but Cadillac sales were down. GMC and Chevrolet sales were up thanks to demand for trucks. Chevrolet Silverado pickup truck sales were up 34 percent in July.
— Ford's sales were up 5 percent to 222,731. F-Series pickup sales, which had been down due to lack of inventory as a new truck went into production, were up 5 percent. But Ford's car sales fell 4 percent.
— Toyota's sales were up less than 1 percent to 217,181. Sales of the Tacoma small pickup jumped 29 percent, while Lexus SUV sales were up 28 percent thanks to the new NX small SUV. But car sales were down. Prius hybrid sales dropped 13 percent.
— Fiat Chrysler's sales rose 6 percent to 178,027. Jeep sales increased 23 percent and Ram sales rose 1 percent, but Dodge and Fiat sales were down.
— Honda's sales rose 8 percent to 146,324. Honda's SUV and truck sales jumped 13 percent, led by the CR-V SUV and the Odyssey minivan. Honda's car sales were up 3 percent.
— Nissan's sales rose nearly 8 percent to 130,872. Nissan said sales of its trucks and SUVs set a new July record, but low gas prices took a toll on the electric Nissan Leaf, which saw sales drop 61 percent.
— Volkswagen's sales rose 2.4 percent to 31,300 vehicles. Sales of the new Golf and Jetta sedans more than doubled over last July.
Associated Press contributed