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US auto sales beat expectations in June, leading carmakers to predict continued strong industry-wide gains this year.
General Motors, Ford and Chrysler said sales accelerated to an annualised pace above 14m vehicles last month, higher than the 13.9m forecast by analysts.
Sales were running as high as 14.5m earlier this year but the rate slowed in recent months, with May coming in at 13.73m. Worries over tepid US economic growth and fallout from the eurozone debt crisis have cast a cloud over consumers, who have pulled back on spending amid growing pessimism.
But auto executives said demand for new cars, delayed during the turmoil of the financial crisis and recession, had buoyed sales.
“Cyclical factors take the consumer up and down from month to month but underneath that is a steady drumbeat of replacement demand,” said Ellen Hughes-Cromwick, Ford’s chief economist. The average age of cars on the road is 10 years and, even as petrol prices have come off recent highs, consumers are attracted by the improved fuel economy of newer models, Ford said.
Potential buyers are also taking advantage of a better environment for making big purchases, said Kurt McNeil, vice-president of GM’s US sales operations. “The combination of new products, available credit, lower fuel prices and modest economic growth was a stronger influence on consumer behaviour than economic and political uncertainty [in June],” he said.
GM’s sales for June climbed 15.5 per cent to 248,750 vehicles, more than double Wall Street’s 7.6 per cent estimate and the highest monthly figure since September 2008. Demand rose for midsized cars as well as for sport utility vehicles.
The biggest Detroit carmaker estimated annualised industry sales would come in above 14m vehicles in June and predicted full-year sales of 14m to 14.5m.
Ford sales rose 7 per cent to 207,759 vehicles, ahead of the 3.7 per cent forecast gain, led by strong increases for its SUVs including the Escape and Explorer models. Ford said industry sales in June were in the mid-14m range and expected full-year sales to reach 14.5m to 15m.
Chrysler beat forecasts of an 18 per cent increase, rising 20.3 per cent in June from a year ago to 144,811 vehicles as consumers bought a wide range of its models from compact cars to pick-up trucks. The company projected an annualised industry sales pace of 14.4m in June.
Toyota led foreign carmakers with a 60 per cent jump in sales to 177,795. Nissan reported a 28 per cent increase to 92,237 and Volkswagen sales rose 34.2 per cent to 38,740.
June’s figures were flattered in comparison to weak sales last year when the auto industry faced parts shortages in the wake of the Japanese earthquake and tsunami.