Automakers report strong US car sales for December

GAS-DRIVEN DEMAND::Sales of larger vehicles like pickup trucks and SUVs surged last month on easy credit access and fuel prices far lower than a year before

Reuters, DETROIT, Michigan

Wed, Jan 07, 2015 - Page 15

Automakers on Monday reported strong US sales last month, boosted by falling gasoline prices, but industry executives and analysts cautioned that growth would slow this year after five years of rapid recovery from the recession.

General Motors Co easily beat analysts’ expectations, logging a 19 percent gain to 274,483 vehicles, the best December for the No. 1 US automaker in seven years. Ford Motor Co’s sales last month of 220,671 were up just 1.2 percent, missing expectations.

“US auto sales are dancing to a very different [and we believe unsustainable] beat,” Morgan Stanley analyst Adam Jonas said in a research note.

He suggested US auto demand has outpaced economic, wage and housing growth rates, thanks largely to easy credit access for consumers.

Even as the pace of sales growth is expected to slow this year, modest growth to the 16.7 million to 17 million vehicles seen by analysts is still encouraging, several company executives have recently said. Any deceleration in US growth could be damaging at a time when other global markets are slowing.

Auto sales are an early indicator each month of consumer spending. A Reuters poll of 11 analysts showed expectations of a 10.5 percent gain for last month.

On Monday, Jeff Bracken, head of Toyota Motor Corp’s subsidiary Lexus brand in the US, said of this year: “Any way you slice it, whether it’s 16.7 [million vehicles] or slightly below or above, it’s still a very healthy industry.”

Toyota executives said they conservatively expect this year’s sales of 16.7 million vehicles, while others, including LMC Automotive, expect this year’s sales to hit 17 million.

Last month, sales of pickup trucks and large SUVs surged, spurred by low gasoline prices.

Average gasoline prices in the US are 34 percent lower than a year ago, and in much of the country, are less than US$2 per gallon (US$0.53 per liter).

Toyota said industry US auto sales last month would be 16.8 million on an annualized basis, but some analysts saw a rate closer to 17 million.

Full-year sales for last year are expected to finish at about 16.5 million vehicles, matching the number in 2006. However, rising demand has allowed automakers to boost prices for their vehicles.