Tags: Auto | Sales | Cars | Economy

US Auto Sales End 2014 Strong But Slower Growth Likely Looms

Monday, 05 Jan 2015 10:22 AM

Automakers reported strong December U.S. sales on Monday, boosted by falling gasoline prices, but industry executives and analysts cautioned that growth would slow in 2015 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 U.S. automaker in seven years. Ford Motor Co.'s December sales of 220,671 were up just 1.2 percent, missing expectations.

"U.S. 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 U.S. 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 U.S. growth could be damaging at a time when other global markets are slowing.

On Monday, Jeff Bracken, head of Toyota Motor Corp.'s Lexus brand in the United States, said of 2015, "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 2015 sales of 16.7 million vehicles, while others, including LMC Automotive, expect this year's sales to hit 17 million.

In December, sales of pickup trucks and large SUVs surged, spurred by low gasoline prices.

Sales of GM pickup trucks Chevrolet Silverado and GMC Sierra surged 35 percent to 81,273, outpacing the F-Series pickups from Ford, which were flat at 74,355 vehicles. Ford's F-150 pickup truck sales remain limited due to the rollout of a new version.

Fiat Chrysler Automobiles' Ram Truck brand pickup sales soared 32 percent to 44,222 vehicles.

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

U.S. average gasoline prices are 34 percent lower than a year ago, and in much of the country, are less than $2 per gallon.

Toyota said industry U.S. December auto sales will be 16.8 million on an annualized basis, but some analysts saw a rate closer to 17 million.

Full-year sales for 2014 are expected to finish around 16.5 million vehicles, matching the number in 2006. Rising demand has allowed automakers to boost prices for their vehicles, however.

Kelley Blue Book, an industry source for vehicle valuations, said Monday the average transaction price for a new vehicle sold in the U.S. market in December was a record $34,367, up 2.5 percent from a year ago.

GM's December transaction prices grew 4 percent from a year earlier to $38,816, KBB said.

Fiat Chrysler's U.S. sales jumped 20 percent in December on strong Jeep SUV and pickup truck sales, but still missed analysts' expectations. FCA's sales of 193,261 for the month were the highest since 2006 for the company once known as Chrysler.

Nissan Motor Co. said on Monday its December U.S. sales grew 7 percent, stronger than expected, while Honda Motor Co.'s 1.5 percent increase fell short of expectations.

© 2017 Thomson/Reuters. All rights reserved.

   
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Automakers reported strong December U.S. sales on Monday, boosted by falling gasoline prices, but industry executives and analysts cautioned that growth would slow in 2015 after five years of rapid recovery from the recession.
Auto, Sales, Cars, Economy
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2015-22-05
Monday, 05 Jan 2015 10:22 AM
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