Spending cuts announced by the U.S. government on Friday were unable to make a dent in the confidence levels of automakers such as General Motors Company(NYSE:GM) and Ford Motor Company(NYSE:F), who expect demand for their vehicles to remain robust.
The U.S. is a nation obsessed with cars and though demand has been a bit sluggish of late due to the prolonged slowdown that the country is passing through, there has been a revival in consumer sentiment in recent months.
Automakers are determined to hang on to this optimism and not let it die away and have announced a slew of new fuel-efficient cars designed to be easier on the pockets of buyers, so far as their fuel consumption is concerned.
Despite a fall in the sales of its Lincoln brands, Ford reported its best February sales in six years.
It’s inevitable there might be a slight, slight offset, but I think the positive factors” boosting auto demand “will overcome,” Ken Czubay, Ford’s vice president of U.S. marketing, sales and service, said on a conference call.
According to industry figures U.S. light-vehicle sales in February rose 3.7 percent to 1.19 million, matching the average estimate of 10 analysts. The annualized sales rate, which is adjusted for seasonal trends, rose to 15.4 million from 14.5 million a year earlier. The average sales pace projected by 15 analysts was 15.3 million.
With Democrats and Republicans deadlocked over how to replace across-the-board cuts, known as sequestration, totalling $1.2 trillion over nine years, President Barack Obama issued an order Friday night putting the reductions into effect — $85 billion worth for the remaining seven months of the current fiscal year.