Strong demand for trucks, SUVs helps Ford and GM raise prices

Strong demand for sport utility vehicles and trucks in June helped General Motors Co and Ford Motor Co offset slowing demand for sedans by allowing them to raise prices on their trucks.

GM and Ford said on Wednesday increases in the average transaction prices for their vehicles, particularly trucks and SUVs, outpaced sales volume growth that fell short of Wall Street expectations.

Ford, for example, said prices for its F-series trucks rose 8 per cent, or $3,600, while sales volume for the pick-up truck line dropped 8.9 per cent in June.

US June auto industry sales will be about 1.5 million vehicles, a rise of 4 per cent from a year ago, Ford said.

GM’s sales fell 3 per cent last month as the company’s small cars slid from year-ago figures, including a 13 per cent drop in Cruze compact sales. Sales of GM’s large SUVs also fell, reflecting fewer sales to fleets, a company spokesman said.

But GM said average transaction prices for all vehicles rose almost $1,000 from a year earlier.

GM shares were down 1.5 per cent at $32.82 on Wednesday morning, below its November 2010 IPO price of $33.00, as the S&P 500 Index was up 0.7 per cent. Ford shares were down 0.5 per cent at $14.93.

GM said overall US light vehicle sales for June should hit a 17.3 million vehicle pace on a seasonally adjusted annualised basis.

The National Automobile Dealers Association this week raised its forecast for 2015 US auto sales to 17.2 million vehicles from 16.9 million. It would be the sixth straight year of solid gains since the recession.

While Ford's sales rose only 2 per cent, it showed the largest increase in the market in the average price of its vehicles, industry consultant Kelley Blue Book said.

Ford’s SUV sales rose 10 per cent but car sales fell 3.5 per cent.

US auto sales, often an early snapshot into consumer spending each month, are expected to rise about 5 per cent for the industry. Truck and SUV sales will again grow at a faster pace than sedans, aided by the low gasoline prices.

Fiat Chrysler Automobiles' US June auto sales increased 8 per cent from a year ago, boosted by the continued strength of its Jeep SUV brand.

Toyota Motor Corp, number three in the US market by sales behind GM and Ford, posted June sales of nearly 210,000 vehicles, up 4 per cent, roughly in line with Wall Street expectations.

Nissan Motor Co US sales rose 13 per cent, led by a 54 per cent increase in its popular small SUV Rogue.

Sales of Fiat Chrysler’s Jeep brand jumped 25 per cent in June.

Chrysler brand sales rose 28 per cent, and its Chrysler 200 sedan sales were up 153 per cent to 18,560 vehicles.

Private industry data reviewed by Reuters showed that in the first half of the year, a large portion of Chrysler 200 sedan sales were to rental agencies.

Chrysler brand sales fell for its Town & Country minivan production slowed as it transitioned to a new model.

Ms Book said the average price paid for a new vehicle in the United States rose 2.5 per cent in June from a year ago to $33,340. Ford reported the highest gains in vehicle pricing, up 6.6 per cent from last year, KBB said.

– (Reuters)