US auto sales rise in June for US big three

(July 3) In June, sales were stronger for top US auto manufacturers. Consumers continued to buy sport utility vehicles and trucks in larger numbers. So far there seems to be no negative reaction to higher fuel prices, interest rates and trade tensions.

Sales rise but investors sell shares in auto firms

Investors were selling off shares in the big three Detroit auto manufacturers, GM, Ford, and Fiat Chrysler during June. This may be caused by rising trade tensions between the US and trading partners and the threat of tit-for-tat tariffs in the auto sector. The tensions have led to a fall in US consumer confidence in June and caused some effect on plans to purchase big ticket items. Some consumers may be buying autos before the price rises due to a trade war.

A poll of economists by Reuters predicted a seasonally adjusted annual rate of 17.0 million vehicles for the U.S. auto industry in June. U.S. vehicle demand in June of 2016 hit a record 17.5 million vehicles .

GM sales are up

The number one US auto manufacturer GM, has stopped reporting its monthly numbers this April but claimed its sales rose 4.6 percent to 758,376 for the quarter that ending in June. The sales increase saw strong truck sales and of new cross-over vehicles.

Kurt McNeil, the vice president of US sales operations said: "Customers are buying with confidence because the economy is strong and they expect it to remain strong.

Ford sales also increased

Ford is the second largest auto manufacturer in the US. The company said it sold 230, 635 vehicles in June compare with 227,979 in 2017. Ford SUV's sold 77,453 vehicles up 8.1 percent and a record for June.

The company said that sales of its popular F-series large pickup trucks were on track to break the previous annual record of 939,511 units set back in 2004. The series is the best-selling model line in the US.

Fiat Chrysler also does well

The company claims that US sales rose 8 percent in June to 202,264 vehicles. The sales spurt was largely driven by Jeep and Ram trucks brands. Jeep sales alone rose a whopping 19 percent while Ram Trucks also posted a 6 percent gain, their best June sales ever. In June of this year the Jeep Cherokee sales rose 89 percent to 22,433 vehicles compared to just 11,895 in June of last year.

Positive signs for auto manufacturers

US jobless rates are at their lowest level since the turn of the century 2000. Average incomes are also beginning to grow more strongly. Nevertheless many analysts are predicting weaker sales for the rest of the year and declining demand next year.

The weaker outlook is caused by rising interest rates on car loans while bankers are tightening terms for car loans according to economist Charlie Chesbrough who argued that autos were becoming less affordable.

GM and other car makers have also warned that if US president Donald Trump imposes steep tariffs on foreign vehicles and imported auto parts this will raise prices to consumers and costs to manufacturers and sales could drop dramatically.

Previously published in Digital Journal