Demand for big pickup trucks fuels June U.S. auto sales
DETROIT (Reuters) - Sales of big, brawny pickup trucks fueled strong demand for new vehicles in the United States in June, driving the industry toward its strongest month since before the recession that drove General Motors Co and Chrysler into bankruptcy.
GM and Ford Motor Co posted stronger-than-expected sales, and Chrysler Group's sales met analysts' expectations as the improving U.S. housing market led to surging demand for full-size pickups at all the U.S. automakers. Toyota Motor Corp also reported surprisingly strong U.S. sales.
"America's families are better off than they were at the beginning of the year and they believe - with good justification - that the economic expansion is going to continue," GM Chief Economist Mustafa Mohatarem said in a statement.
Overall U.S. auto industry sales in June are expected to show a rise of up to 8 percent compared with a year earlier and could reach their strongest monthly pace since the recession pushed Chrysler and GM to seek bankruptcy protection in 2009.
Economists polled by Thomson Reuters expect an annual sales rate in June of 15.4 million vehicles. Several analysts and research firms that follow the auto industry expect a rate of 15.5 million to 15.7 million.
Chrysler, majority-owned by Italy's Fiat SpA, falls in the optimists' camp as it expects a sales pace in the month of about 16 million vehicles, including medium and heavy trucks. On that basis, Ford expects the industry to finish in the range of just over 16 million vehicles.
Medium and heavy trucks typically account for about 300,000 sales annually.
"The fundamentals for continued industry gains in new-vehicle sales remain intact," Chrysler U.S. sales chief, Reid Bigland, said in a statement.
GM expects a rate of 15.8 million, which would be the highest rate since November 2007. Volkswagen AG executives anticipate something in the mid-15 million range.
Monthly sales are seen as an early indicator of the U.S. economy's health. The auto industry has held up better than the broader economy as easier credit availability and pent-up demand for vehicles have driven demand.
In May, U.S. auto sales rose more than expected as construction workers and oil drillers bought more pickups to meet growing demand for their services, a trend major automakers expect to continue through the rest of the year.
GM's sales came in far higher than expected, rising 6.5 percent to 264,843 cars and trucks, or their highest level for June since 2008. Analysts had expected growth closer to 2 percent.
Sales of the No. 1 U.S. automaker's two top-selling vehicles, the Chevrolet Silverado pickup and Cruze small car, rose 29 percent and 73 percent, respectively. Sales of the GMC Sierra pickup were up a third.
Ford's sales also came in stronger than expected with an increase of 13.4 percent to 235,643 vehicles, above the 11 percent gain Wall Street had expected. It was the best June result for Ford since 2006. The company's F-150 pickup saw sales jump 24 percent.
Chrysler's sales rose 8 percent to 156,686 vehicles on strong demand for its two best-selling vehicles, the Ram full-size pickup (up 24 percent) and Jeep Grand Cherokee SUV (up 33 percent). It was the best June total for the automaker since 2007.
Toyota's sales rose a far stronger than expected 10 percent to 195,235 vehicles. Nissan's June U.S. sales also came in stronger than expected, rising 13 percent to 104,124 vehicles.
GM shares were up 1.7 percent at $34.59 on Tuesday morning on the New York Stock Exchange. Ford shares were up 2 percent at $16.06.
(Editing by John Wallace and Matthew Lewis)