Sales of small cars raced ahead in March as buyers flocked to more fuel-efficient vehicles, a trend major U.S. automakers expect to persist if gasoline prices continue to rise.
In addition to gas-sipping cars, the improving U.S. job market helped most major automakers race past expectations for U.S. sales in March with the main exception being General Motors Co., which pulled back on its incentives.
“When I look at the overall picture, I say ‘Hey, this recovery’s intact. It’s still going strong in the U.S.,”’ said Gary Bradshaw, a portfolio manager with Hodges Capital Management, which owns Ford shares. “More people going back to work, they can afford cars.”
Executives at GM and Ford Motor Co., which reported sales gains of 11.4 percent and 19 percent, respectively, added that the Japan crisis was unlikely to bite into U.S. sales in the near-term.
GM shares rose 4.4 percent to end at $32.41 on the New York Stock Exchange Friday, while Ford stock was up 1.7 percent.
Analysts said GM’s gain was larger because its stock has been more volatile and investors were relieved by the good news about the sector despite the lower-than-expected sales gain.
The strong sales, combined with the Labor Department’s report on solid U.S. job growth last month, boosted hopes that consumers will have more money in their wallets and feel confident enough to buy more cars and trucks, investors said.