Auto sales refer to the number of vehicles sold in the United States by both domestic and foreign automakers. The reading is reported each month and generally compared on a year-over-year and month-to-month basis. In a positive auto market, you obviously want to see growth. Auto sales are generally dependent on the strength of the economy—namely the jobs market, consumer confidence, and the level of interest rates. The low financing costs we have seen during the past few years have helped to drive up the demand for autos due to the cheap carrying costs. Steady job creation has also helped to beef up the auto market.
As long as interest rates don’t rise too fast, auto sales should perform fine as we move into 2015. Investment guru Warren Buffett’s fund Berkshire Hathaway, Inc. (NYSE/BRK-B) added a majority stake in the Van Tuyl Group, which is the fifth-largest auto dealership group in the country. Buffett is positive on the auto sector.
Big benefactors of the growth in auto sales have been General Motors Company (NYSE/GM) and Ford Motor Company (NYSE/F)—the two largest automakers in the country. In September, auto sales were sizzling, with General Motors and Chrysler recording sales growth of 19.4% and 18.8%, respectively. The annualized growth in September was 16.43 million vehicles, up from an annualized 15.43 million a year earlier in September, according to Autodata.