It was just not Fiat Chrysler Automobiles NV (NYSE:FCAU), but most of the other major US automakers which reported better than expected sales in the month of February. In fact, together, their sales were the best since 2000. Low oil prices, near zero-interest rates and fetching deals drove buyers to showrooms.
The annualized selling rate was as high as 17.5 million, nearly 1.1 million higher than 2015, reported Autodata, the research firm. Other automakers in the same record-breaking sales trend were Ford Motor Company (NYSE:F) and Honda Motor Co Ltd (ADR) (NYSE:HMC).
Among all the auto selling-high, only General Motors Company (NYSE:GM) reported a fall in sales figures. However, shareholders were unaffected by the unexpected decline in sales. Instead investors reiterated their confidence in the new strategy of selling less number of low-cost vehicles into rental fleets, pushing share prices higher.
Sales at GM fell by nearly 1.5%, in sharp contrast to the 5.1% gains most of the auto companies made. However GM did post some segment-based gains. By cutting-back on the deliveries it made to rental agencies by as much as 39%, it grew its retail sales by nearly 7%. According to General Motors Company (NYSE:GM) Vice President, Kurt McNeil, one of the main benefits of lowering its fleet cars delivery was the improved profitability.
Sports Utilities, Trucks High sellers
Research firms in the auto industry reveal that the growth in auto sales is a reflection of the US economies growth pace. The increase in jobs in the country, and the low interest rates are driving car and pickup trucks sales higher, reports claim.
However, an additional driver of the growth in sales is the fact that many are opting or newer cars, since many of the current cars are of the previous generation. This has meant that car dealers witnessed increase in number of footfalls. Dealers have to been quick to offer various discounts, like President Day’s discount further driving sales.
Research firm, AutoTrader.com, reports that the average American buyer is now confident and is keen to buy new vehicles, especially “sports utilities and trucks.”
In sharp contrast to General Motors Company, Ford Motor Company believes the ‘rental fleets’ are fetching it “very good business.”