Automakers show strong June sales
By Bernie Woodall and Ben Klayman
(Reuters) - Most major automakers showed stronger-than-expected U.S. June sales gains as low interest rates, falling gas prices and still-significant incentives encouraged consumers to set aside concerns about the economy.
Shares of General Motors Inc (GM.N: Quote) jumped more than 6 percent as the No.1 U.S. auto maker reported a 16 percent increase in vehicle sales from the previous year and said June was its best performing month since September 2008. Ford Inc's (F.N: Quote) sales climbed 7 percent and its shares rose 3 percent.
Of the major automakers that have reported sales so far, only Toyota Motor Corp. (7203.T: Quote) missed analysts' expectations. The third-biggest automaker in U.S. sales still managed a 60 percent increase, rebounding from last year's low point after the Japanese earthquake and tsunami.
Auto sales are an early sign of consumer spending and have been one of the bright spots in the U.S. economy this year. Deteriorating European markets have led industry executives to worry about possible contagion spreading to North America. On Monday, data from the Institute for Supply Management showed U.S. manufacturing shrank in June for the first time in nearly three years, a sign of a slowdown in the economic recovery.
Ford chief economist Ellen Hughes-Cromwick said falling gas prices are "acting like a tax cut for consumers (and) helping to boost discretionary incomes for households."
General Motors Co (GM.N: Quote) and Ford Motor Co each said that U.S. auto sales are on pace to top 14 million vehicles on a seasonally adjusted annualized basis. This would be a rebound from a disappointing May, when the annual pace was around 13.7 million.
On average, analysts surveyed by Reuters expected a 13.9 million annualized sales rate in June.
GM said its vehicle sales in June totaled 248,750. All four of GM's U.S. brands - Buick, Cadillac, Chevrolet and GMC -- showed sales increases for the month. Continued...