SUVs and luxury vehicles are selling fast defying recession era predictions that Americans would downsize and stop flaunting their wealth through cars. It was reported today that luxury car sales were up 10 percent during the first six months of the year while during the same period mass market vehicles rose by just 3 percent. Most analysts believe that it was this demand that drove July’s strong US vehicle sales. Sales of new cars and trucks were expected to rise 3 percent to nearly 1.5 million which is being seen as a huge positive for thee sector for the near term.
It was reported that General Motors and Fiat Chrysler both saw 6 percent sales gains whole Honda and Nissan saw 8 percent gains. Ford’s US sales rose 5 percent while sales for Volkswagen were up by 2 percent. Toyota’s sales remained flat hurt by a big dip in car sales. Analysts on the street believe that the automakers benefited from relatively low gas prices which have plunged by close to 60 percent since the end of last year. Also, summer discounts to lure buyers also helped to provide the bump to sales during the reported period.
Many analysts on the street believe that the plunge in gas prices seen over the last couple of months could play a pivotal role in pushing auto sales higher for the rest of the year. Many believe that most of the consumer spending over the last couple of months can be directly related to auto sales. Most believe that the rise in May in consumer spending was on the back of heavy spending on autos by consumers. The strengthening labour market is being seen as a huge positive as many industry experts believe it could lead to higher growth in auto sales in the coming quarters.