U.S. November car sales surprise on upside

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U.S. November car sales surprise on upside

U.S. November car sales surprise on upside
2018-12-05 10:54:43

(Reuters) – Holiday season deals propped up U.S. auto sales in November, limiting the scale of annual falls at some carmakers and putting overall figures on course to top analysts’ expectations, numbers from several top producers showed on Monday.

U.S. November car sales surprise on upside 1

The front grille (L) and rear tail light (R) of the new Honda Civic is seen on a dealer’s lot in Silver Spring, Maryland U.S. June 1, 2016. REUTERS/Gary Cameron

No.1 carmaker General Motors (GM.N) posted a roughly 1 percent rise in sales, according to a source familiar with the numbers, compared with a fall of more than 2 percent expected by analysts.

Its next biggest rival, Ford Motor Co (F.N), reported a 7 percent fall in sales but said overall industry sales should have reached at least 17.5 million annualized – above economists’ expectations of 17.2 million.

Bolstered by Washington and Beijing signaling a three-month truce in their trade war over the weekend, shares in both companies rose by more than 4.5 percent in morning trade in New York.

“Relative to the macro-economic outlook, Ford was upbeat on its monthly sales call, suggesting relative consumer resiliency in the face of rising interest rates,” J.P.Morgan analyst Ryan Brinkman said.

U.S. sales had been expected to fall for a second year running as higher interest rates and tariffs raise prices at a time when many car owners have already replaced their older vehicles.

A continuing boom in SUV sales, however, continues to help carmakers and November traditionally benefits from efforts by dealers to clear out stock ahead of the new year.

Honda Motor Co (7267.T) and Toyota Motor Corp (7203.T) both reported declines – of 9.5 and 0.6 percent respectively, but Fiat Chrysler, whose sales have been surging on the back of its strength in jeeps and SUVs, rose 17 percent.

While Ford blamed weak sales of Focus sedans and Mustang sports cars for its November sales decline, it indicated full-year industry numbers for 2018 could be on par or slightly higher then a year ago.

Charlie Chesbrough, senior economist at Cox Automotive, owner of the Autotrader online automobile market and the Kelley Blue Book car valuation service, said light vehicle sales had beaten his forecast, helped by strong numbers for trucks and compact utility vehicles.

“Heavy incentives in November likely helped drive strong end-of-month traffic,” he said.

Automakers including Ford have reduced production of traditional passenger cars due to slumping sales, while gradually moving to larger SUVs and trucks, which tend to be more profitable.

Ford last month reshuffled workers at several of its plants to meet rising demand for pickup trucks and large SUVs.

Honda said its sales fell 9.5 percent to 120,534 vehicles, more than doubling the pace of decline as it was hurt by lower volumes on passenger cars like its Civic.

Jeff Schuster, head of global vehicle forecasts at industry consultant LMC Automotive, said slower interest rate hikes by the Federal Reserve in 2019 and a pause in any new tariffs could help stabilize a slowing auto market.

Reporting by Ankit Ajmera in Bengaluru; Editing by Saumyadeb Chakrabarty and Patrick Graham

Our Standards:The Thomson Reuters Trust Principles.

Images are for reference only.Images gathered automatic from google.All rights on the images are with their original owners.



U.S. November car sales surprise on upside
2018-12-05 10:54:43

Images are for reference only.Images gathered automatic from google.All rights on the images are with their original owners.

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