Sales of cars and light trucks in the U.S. rose last month to the fastest pace since November, exceeding analysts’ estimates after Korean automakers reported surprising increases.
Light-vehicle sales rose 0.6 percent to 1.55 million, according to researcher Autodata Corp., beating estimates for a 0.8 percent decline. The annualized rate, adjusted for seasonal trends, jumped to 17.2 million, the fastest rate in four months. The average estimate was for a 16.9 million pace.
Combined sales of Seoul-based affiliates Hyundai Motor Co. and Kia Motors Corp. rose 9.9 percent, blowing away estimates for a combined decline of 4.5 percent. This helped make up for an otherwise ho-hum month in which General Motors Co. and Honda Motor Co. sales fell more than analysts had estimated and Ford Motor Co. and Nissan Motor Co.’s also declined.
“New products are lifting the industry: The customer has never had more choice,” said Bob Carter, a senior vice president for Toyota Motor Corp., which reported a better-than-estimated 4.9 percent sales increase. “And we have fundamentally good economics, unemployment is down, fuel prices are very low and disposable income is up.”
Fiat Chrysler Automobiles NV reported a 1.7 percent sales increase that matched analysts’ estimates and secured its 60th straight month of year-on-year increases.
Fiat Chrysler’s U.S. unit delivered 197,261 vehicles last month. Its Jeep brand sales rose 23 percent last month, leading the U.S. arm of Fiat Chrysler to its best March since 2007, the Auburn Hills, Michigan-based outfit said in a statement. Chrysler and Ram brands also had increased sales while Dodge and Fiat posted declines.
FCA shares rose 0.3 percent Wednesday to close at $16.36. GM fell 2 percent to $36.74 and Ford dropped 1.4 percent to $15.91.
“Prices are going up more than incentives, and that suggests there’s still strength in the market,” said Michelle Krebs, a senior analyst with AutoTrader.com. “We’re just not going to see the really big increases we’ve had the last couple years.”
The U.S. economy continues to recover and all the indicators, from unemployment to interest rates, suggest that 2015 auto sales will rise for a sixth straight year. U.S. auto sales haven’t increased for more than five straight years since at least 1927, according to records compiled by trade publication Automotive News.
GM sales, down 2.4 percent, missed analysts’ estimate of a 0.1 percent increase as a 14 percent gain in trucks and SUVs couldn’t overcome a 21 percent decline in cars. Ford’s light-vehicle sales fell 3.5 percent, better than a 4.3 percent decline predicted by analysts. Nissan’s deliveries dropped 2.7 percent, less than the 5.2 percent reduction analysts had projected.
Honda deliveries fell 5.3 percent, missing projections for a 1.5 percent increase, the average of six analysts’ estimates.
The National Automobile Dealers Association predicted Monday that the Federal Reserve will hold off on raising interest rates through the summer, giving vehicle sales a boost that can offset slow economic growth in the start of the year. U.S. gross domestic product for the period ending Tuesday probably rose 2.1 percent, NADA estimated.
Light-vehicle sales in the U.S., which rose 9.2 percent for the first two months of the year despite the bitter cold, have been boosted by cheap gasoline and by low interest rates that have reduced borrowing costs.
Through three months, sales are up 5.6 percent to 3.95 million.
Kia is outpacing that with deliveries up 6.1 percent so far this year. It’s the Korean brand’s best first quarter ever in U.S., said Michael Sprague, executive vice president for sales and marketing for Kia Motors America.
The brand unveiled a new Optima mid-sized sedan, its most popular model, on Wednesday at the New York auto show. It has an extended the wheelbase and added trunk capacity to go with its coupe-like silhouette, Orth Hedrick, vice president of product planning at Kia Motors America, said at the event. Designers took measures to make the car quieter to drive, including increased insulation of the dashboard, the windshield, side moldings and structural adhesives.
Hyundai’s rise was powered by a 34 percent increase in sales of the Elantra small car.
Toyota’s Lexus, which debuted a new version of its top seller, the RX sport utility vehicle, has seen sales jump 19 percent for the first three months.
“It continues to really look great for the industry,” said Jeff Bracken, U.S. general manager for the Lexus brand. “The first quarter of this year is probably going to be the best first quarter in 15 years.”