Truck Demand Helps Lift Sales to 11-Year High
The U.S. auto industry recorded its highest sales level in 11 years in June, with an annual selling rate of 16.7 million vehicles, as strong truck demand and price discounts lifted Ford Motor Co. and the rest of the industry.
The sales rate was the highest since August 1987, when the annual selling rate was 16.79 million vehicles. It topped May’s rate of 16.3 million and the strike-weakened 14.2 million of June 1997.
Industrywide sales exceeded expectations, with a 14% increase, as auto makers benefited from discounts averaging $1,500 a vehicle, 50% more than a year ago, and from low U.S. interest and jobless rates. Yet with discounts set to expire and General Motors Corp. hobbled by strikes, auto makers are preparing for a rough summer.
“May and June were the boom,” said David Healy, an analyst with Burnham Securities Inc. “That’s probably just as well, because sales are just going to collapse in July.”
Ford said its sales rose 11% in June from the same period a year ago, capping a quarter in which auto makers sold 4.54 million units, breaking a record of 4.51 million in the second quarter of 1978.
The highest monthly seasonally adjusted annual sales rate was 21.23 million in September 1986.
Dearborn, Mich.-based Ford’s 11% increase in sales of domestic cars and light trucks beat predictions of a 3% gain. Its total monthly sales, which include imports and heavy trucks, were 412,184, the highest since June 1978.
The world’s second-largest auto maker said light-truck sales rose 18%, from the same month a year ago, to 241,781 trucks. Domestic car sales rose 2.8% to 167,593 vehicles.
Ford said its total truck sales of 242,906, including heavy-duty trucks, were the most sold by any maker in a single month.
Ford stock rose $1.88 to close at $59.75 on the New York Stock Exchange after setting a 52-week high of $59.94.
Two GM strikes, now in their fifth week, also are expected to hurt sales in July and August because GM dealer inventories are shrinking. GM said last week it expects its July sales to fall as much as 40% below the year-ago level.
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END IN SIGHT?
Pressure is mounting to settle two strikes at GM. A1
