Cheap financing, improving consumer
confidence and a rebound by Toyota Motor Corp have all contributed to the most spectacular
auto sales in the past 4 ½ years in the U.S.
While analysts had estimated sales of
14.5 million units, the actual sales on an annualized basis till September were
14.94 million, the highest rise since March 2008, four months after the U.S.
recession of 2007 to 2009 began.
The sales for September month rose to 1,188,865
new vehicles, up 13 percent. Analysts had expected only a 9 percent increase. According
to General Motors Company(NYSE:GM) and Ford Motor Company(NYSE:F), rising home
prices and fewer jobless claims were the reasons for the rise in car purchases.
Easier availability of cheap financing
was another factor which spurred auto sales. A large number of Toyota buyers
last month received in no interest loan.
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"The
money is so cheap now," said an analyst at TrueCar.com, and added,
"Higher resale values and cheap money has been enabling automakers to
offer some of the most attractive leasing programs we've seen in years."
"I
think in general with the economy chugging along at about 1.5 percent to 2
percent that we are gradually seeing people come back," said Ellen
Hughes-Cromwick, chief economist at Ford.
The largest U.S. automaker General
Motors has said that the sales of its mini, small and compact cars nearly
doubled last month. Ford’s small car sales were also up by 73 percent. This is
because the rise in fuel prices has encouraged people to shift from trucks to
cars.
"There
has been a fundamental shift of truck to car that we've been seeing for the
past few years," said Don Johnson, sales chief at Chevrolet, and went on
to say that the September results indicated a continuation of that trend.
At closing bell, Ford shares were
trading at $9.79, down 1.4 percent. On the other hand, the General Motors stock
had climbed a 2.6 percent and was changing hands at $23.68.
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