New car sales beat Wall Street expectations

September 2, 2015 01:58 PM

A trio of positive money trends put more people behind the wheels of new cars in August than financial analysts had expected.

Forbes cited cheap gas, an improving economy and easy credit for car loans as the engines of a surprisingly good month for automakers. That's not to say sales actually rose in the doldrums of summer - just that sales fell less than feared.

Jeeps lead the way for Fiat Chrysler
While the overall trend was for lower losses, a number of models and vehicle makers actually increased sales. Jeeps flew from showroom floors onto dirt roads at a record pace, jumping 18 percent. August proved the best sales month in history for the rugged vehicle descended from battlefield use by the U.S. Army. That performance powered parent company Fiat Chrysler Automobiles to a nearly 2 percent surge despite Wall Street's prediction the company's sales would decline, Reuters reported.

"Car sales will hit 17.5 million in 2015"

Sales setbacks were lower than expected at General Motors, Honda, Toyota and Nissan.

Ford SUVs see highest sales in 12 years
Taking a closer look at Ford demonstrates a wider trend: Low gas prices appear to have re-ignited drivers' fondness for sport utility vehicles. Sales of Ford SUVs spiked 12 percent to have their best month in more than a decade. Those robust sales helped Henry Ford's company notch an overall sales increase of more than 5 percent in August.

Strength of SUV sales extended into another category of vehicles not known for their fuel efficiency: pickups. Ford's signature F-series of trucks saw a 5 percent jump in sales during August.

GM exec makes sunny forecast
Over at competing GM,  the month saw a sales drop of less than 1 percent, beating the forecasts of industry observers. The vice president of U.S. sales for the nation's largest auto marker told Forbes that financial fundamentals bode well for future months. 

"All of the economic fundamentals that we look at," said Kurt McNeil, "including job growth, disposable income and fuel prices, are in good shape and that should keep sales strong."

As they did at Ford, truck sales shone during August for GM. GMC saw a mammoth 21 percent jump in truck deliveries, Forbes noted. Sales of GMC Sierra trucks plus those of Chevrolet's Silverado outstripped sales of the Ford F-series.

U.S. families are buying lots of new trucks.U.S. families are buying lots of new trucks.

More than 17 million vehicles will be sold this year
Nationwide, sales of all new cars are on stride for 17.5 million this year. That's about 200,000 more than expected by a group of economists polled by Thomson Reuters.

Car makers can smile about another aspect of the better-than-expected sales news: It comes without the usual Labor Day sales bump being included. Because the holiday this year falls so late, on Sept. 7, deals closed on Labor Day aren't being counted for August. In most years, auto manufacturers fold sales made on the traditional end-of-summer holiday into their August numbers.

Car credit bubble?
Some experts warn that one of the underpinnings of all these car sales could be poised for implosion. Looser standards for auto loans are putting some observers in mind of the go-go era of home mortgages that set off the Great Recession, according to Fortune Magazine. Earlier this year the terms for new-car loans stretched to a whopping 66 months - that's five and a half years. Some lenders are signing drivers up to loan payback periods of seven years in an effort to eek out returns despite interest rates that remain historically low.

If you bought a new car recently, local auto repair shops are handy to give your new ride the maintenance it needs for many years on the road.

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