NEW YORK — US new auto sales in June raced past expectations on lower gas prices and still-generous incentives, and are on track to score their best year since 2007.
The surprisingly strong June in which sales rose 22 per cent from a year ago helped ease fears that weaker-than-expected results in May would suggest a slowdown in demand.
June's annualised sales rate of 14.1 million vehicles, according to Autodata Corp, beat analysts' average estimate of 13.9 million.
Before the US economy sank into recession, annual auto sales tallied 16.1 million in 2007. They plunged to 13.2 million in 2008 and a 27-year low of 10.4 million in 2009, before beginning a slow recovery. Last year, US auto sales totalled 12.8 million.
Shares of General Motors Co jumped more than 6 per cent on Tuesday as the No 1 US auto maker posted a 16 per cent increase in vehicle sales from the previous year and said June was its best performing month since September 2008. Sales by Ford Motor Co, the second-largest US automaker, climbed 7 per cent and its shares rose 3 per cent.
Of the major automakers reporting US sales on Tuesday, Toyota Motor Corp posted a 60 per cent gain, to 177,795, that still fell short of analysts' expectations. The strong rebound by the third-biggest automaker based on US sales followed a low point after the Japanese earthquake and tsunami last year.
Sales of industry No 4 Chrysler rose 20 per cent to 144,811 vehicles, slightly topping analyst expectations. It was the 27th consecutive month that Chrysler sales topped those from the previous year, and its best June sales since 2007.
No 5 Honda Motor Co fell just short of several analysts' targets, while posting a 49 per cent hike in June sales, to 124,808.
Auto sales are an early sign of consumer spending and have been one of the bright spots in the US economy for much of the year, although they trailed analysts' expectations in May, when the annual pace was around 13.7 million.
On average, analysts surveyed by Reuters had expected a 13.9 million annualised sales rate in June.
In the first half of 2012, some 7.27 million new cars and trucks were sold in the United States, indicating full-year sales of 14.5 million.
Deteriorating European markets have led industry executives to worry about possible contagion spreading to North America. On Monday, data from the Institute for Supply Management showed US manufacturing shrank in June for the first time in nearly three years, a sign of a slowdown in the economic recovery.
Ford chief economist Ellen Hughes-Cromwick said falling gas prices are "acting like a tax cut for consumers (and) helping to boost discretionary incomes for households.
GM said its vehicle sales in June totalled 248,750. All four of GM's US brands — Buick, Cadillac, Chevrolet and GMC — showed sales increases for the month.
Michelle Krebs, senior analyst with Edmunds.com, said sales were underpinned by pent-up demand. She said buyers were encouraged by low interest rates, merchandising promotions such as zero-interest loan offers and price incentives. — Reuters
