(Reuters) – U.S. auto sales rose slightly in October, hit by rising interest rates and higher vehicle prices, and No.2 carmaker Ford Motor Co. warned of slipping consumer confidence, indicating sales volumes would continue to moderate in 2018.
Ford on Thursday reported a 5 percent decline in sales for its pickup trucks, while overall sales fell 3.9 percent to 192,616 units in October hurt by lower passenger car demand.
Ford said consumers are relatively confident about economic conditions, albeit slightly less so than in September, citing data for October from University of Michigan’s consumer sentiment index, adding payments have crept up with rising interests rates.
The number of respondents in the index saying that it was a good time to buy a car fell 8 points from September to 59 percent on higher concerns about vehicle prices and interest rates, Ford added.
“Interest rates are taking payments up along with our transaction pricing. So little bit of pressure there,” said Mark LaNeve, vice president, U.S. marketing, sales and service at Ford.
Ford’s transaction prices increased by $1,400 in October from a year ago, compared with $330 for the overall industry.
The carmaker said its gross stock increased to 87 days from 79 a year ago, as its dealers anticipated more vehicle demand in November and December. The industry sees 60-65 days inventory as healthy.
U.S. car sales, which dropped 2 percent last year from a record high of 17.55 million in 2016, are expected to fall further in 2018, hurt by rising interest rates and the return of more late-model used cars to dealer lots.
But automakers have been helped as more U.S. consumers shift away from traditional passenger cars to larger SUVs and trucks, which tend to be more profitable for producers.
Smaller rival Fiat Chrysler Automobiles NV said U.S. sales rose 16 percent on higher demand for its Jeep and Ram vehicles..
SUVs have also been a bright spot for Ford, contributing about 35 percent of its total U.S. sales volumes in October, up from 31.6 percent a year ago.
Japan’s Toyota Motor Corp separately said its U.S. sales rose about 1.4 percent to 191,102 units, due to increased demand for Highlander and Tacoma SUVs. (https://toyota.us/2PBBg2S)
Honda Motor Co Ltd’s U.S. sales fell 4 percent to 122,182 vehicles, on weaker demand for passenger cars while its smaller rival Nissan Group’s sales fell 10.6 percent to 109,962 vehicles.
Earlier this year, No. 1 U.S. automaker General Motors Co switched to reporting sales quarterly instead of monthly.
(Reporting by Rachit Vats and Ankit Ajmera in Bengaluru; Editing by Arun Koyyur, Bernard Orr)