Kelley Blue Book released its U.S. auto sales projections for July on Thursday. The research company expects 2.6 percent year-over-year sales growth for a total of 1.47 million vehicles purchased during the month.
General Motors Company GM, Toyota Motor Corp (ADR) TM and Ford Motor Company F are expected to be the top three sellers. Kelley Blue Book's analysts also predict that Fiat Chrysler Automobiles NV FCAU will continue a 64-month growth streak "driven almost entirely by the Jeep brand."
The agency also forecasts 3.6 percent annual growth in U.S. auto sales, which would make 2015 the best year for cars since 2001.
Benzinga spoke with Kelley Blue Book analyst Tim Fleming to get his thoughts on the figures.
SUVs Are The Story
Fleming highlighted the increasing popularity of small SUVs and utility vehicles as "the main story" in the auto market. He noted that while car sales are actually in decline, SUV sales are up about 10 percent year-over-year.
Fleming said that consumers "really love the extra utility and ride height." Plus, according to him, the vehicles aren't much more expensive than sedans, especially given consistent and relatively low gas prices. Furthermore, he told Benzinga, larger cars are quickly catching up to their smaller counterparts with regard to fuel efficiency.
American Manufacturers Benefit
This trend toward larger vehicles has yielded benefits for American manufacturers, said Fleming. He noted Chrysler's success with its Jeep division, saying also that Asian firms tend to focus on cars.
Korean brands, Fleming said, are especially car-centric. According to him, three quarters of HYUNDAI MOTOR CO LTD HYMLF and KIA MOTORS CORP ORD KIMTF's sales are driven by sedans.
Lease, Lease, Lease
Fleming also highlighted the importance of leases, which are considered new car sales in the Kelley Blue Book report. "Leasing is hitting about 30 percent of the car market right now."
With interest rates near zero, he said, financing leases is relatively easy. Furthermore, Fleming believes that high used car prices are helping keep lease payments affordable.
"Car sales are a good representation of consumer spending," he said, "so this is a good indicator for the overall U.S. economy."
Today And Beyond
Curiously, all of the big three U.S. automakers (Ford, GM, and Fiat Chrysler) are struggling in the market Friday. The firms are each down between 1.5 and 2.5 percent.Image Credit: Public Domain
© 2022 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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