General Motors Co on Friday reported a weaker-than-expected gain in June U.S. sales and tempered its full-year forecast for the industry as some consumers were still holding back on buying cars.
Some consumers have decided to sit on their hands and delay their purchasing, GM U.S. sales chief Don Johnson told reporters on a conference call.
We view this as temporary and we do expect to see a return to our projected SAAR trend line for the year, he added, referring to the seasonally adjusted annual rate of sales or SAAR.
Monthly car sales figures are among the first snapshots of consumer demand. Investors hope the industry can reverse May's disappointing results, which raised fears the U.S. recovery was running out of steam.
Investors received good news more broadly as the pace of growth in the U.S. manufacturing sector picked up for the first time in four months in June, a sign of optimism for the sputtering economy.
We think the recovery will get back on track despite the slow housing market and the stubborn levels of unemployment, Johnson said.
However, he said the U.S. auto industry was likely to finish at the lower end of the company's forecast for 2011 sales of 13 million to 13.5 million.
GM reported sales last month, excluding four brands it dropped, of 215,358 cars and trucks, up 10.5 percent from 194,828 last year. GM sold or discontinued Pontiac, Saturn, Saab and Hummer.
Several analysts had expected GM to report a gain in the range of 11 percent to almost 20 percent. The U.S. automaker also came in below expectations in May.
The rest of the automakers are scheduled to report their June sales later on Friday.
U.S. auto sales in June are expected to rise only 2 percent from May -- but by a healthier 8 percent on a year-over-year basis. The May figures reflected tighter inventory caused by Japan's March 11 earthquake, which caused vehicle prices to spike and led more consumers than expected to hold off on buying cars.
For June, the average forecast of 41 economists surveyed by Reuters was for a sales rate on a seasonally adjusted annualized basis of 12 million vehicles, up from 11.1 million last year and 11.8 million in May.
That is below an average of 13.1 million new light vehicles sold on an annualized basis in the first four months of the year, before the Japan earthquake significantly affected sales.
GM shares were up 6 cents at $30.42 at midday on Friday. Shares of Ford Motor Co were up 1.2 percent at $13.95, while the broad S&P 500 Index was up 0.9 percent.
(Reporting by Deepa Seetharaman and Ben Klayman in Detroit, editing by Matthew Lewis)