Auto Sales Reach 10-Year High

U.S. auto sales were very strong last month:

The U.S. auto industry remained on track for the best sales year in almost a decade as consumers bought cars and trucks at the fastest monthly pace since early 2006.

Sales of pickup trucks and SUVs in May again led the way, which bodes well for profit margins of the major automakers. Consumers are shying away from cars and snapping up trucks and sport utility vehicles as the national average price of gasoline, at $2.75 a gallon, is nearly a dollar less than at this time last year.

As has been the case since the 2008-2009 recession, the auto industry’s recovery continues to outpace that of the overall economy, which is on course to grow 0.8 percent in the second quarter, according to Federal Reserve forecasts.

Consumers are finding it easier to obtain auto loans – another factor in boosting sales, analysts have said. Experian reported the average length of U.S. loans for new and used vehicles in the first quarter hit record highs, and nearly 30 percent of new-vehicle loans have payback periods longer than six years.

This probably represents a rebound from the cold winter. Sales at Ford (F) dropped by 1.3% (Wall Street had been expecting a bigger drop), and the F-Series trucks fell by 10%. Demand is still high for the F-150 as Ford is ramping up production.

Posted by on June 2nd, 2015 at 3:37 pm


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