Car Sales Rise, Beating Expectations
US auto sales rose in June despite rising interest rates and a glut of late-model used vehicles.
U.S. auto sales have proved resilient so far in 2018, with many of the largest car sellers posting sales increases over the first six months of the year despite predictions that demand would cool.
The auto industry is expected to post a slight increase in sales for the first half of the year when final results are tallied later Tuesday, including a 2.5% increase in June compared with the same month last year, said J.D. Power. June had one more selling day compared with last year.
The sales in the back half of the year could lose steam if proposed tariffs are enacted—such as the 25% tax on all vehicle imports—and could slow sales dramatically, said Jeff Schuster, president of global vehicle forecasting at the firm LMC Automotive.
“A trade war involving vehicles would be devastating to sales volume in the United States and other key markets,” Mr. Schuster said.
Mr. Schuster projects U.S. vehicle sales would decline by up to 11% annually, or about two million cars, if a 25% tariff is passed along to the consumer. Even if auto makers absorb half of cost of the tariff, sales could decline by 917,000 units annually.
- General Motors Co., reporting for the first time since it announced it would move to reporting sales on a quarterly basis in April, said sales were up 4.6% to 758,376 vehicles for the second quarter spanning from April through June, with sales of GMC and Chevrolet brand vehicles both reporting about 6% increases for the quarter. All auto makers besides GM report on a monthly basis.
- Ford Motor Co. reported a 1% increase, selling 229,537 vehicles during June. The increase was driven by sales of the company’s sport-utility vehicles, such as the Escape and Expedition. Sales of Ford’s cars were down 13% for the month.
- Toyota Motor Corp. said sales increased by 3.6% in June to 209,602 units. Sales of the RAV4 and Highlander SUVs drove the increase, with both vehicles posting double-digit increases.
- Honda Motor Co. reported a 4.8% increase in June sales, selling 146,563 vehicles. Double-digit gains of the CR-V and Pilot SUVs led to the increase.
- Nissan Motor Co. also saw a sales increase in June, with sales up 1.2% to 145,096 vehicles for the month. SUV sales pushed the auto maker to a June sales record, with all of its SUVs including the Rogue and Armada posting gains.
Rush to Beat Tariffs
Was this a last-minute rush to beat tariffs?
Perhaps. As noted on July 1, Trump's tariffs constitute a $54 Billion Tax Hike on Autos and the EU threatens $300 billion retaliation.
Autoblog reports tariffs could cost American consumers $5,800 per vehicle.
That's quite an increase.
Mike "Mish" Shedlock