U.S. auto sales for January have exceeded analysts' expectations, and they are anticipated to increase in the next few months due to low gasoline prices and easy credit terms offered by the automakers.
General Motors, Ford and Fiat-Chrysler assumed that the first month of the year would be a slow month of sales historically but were all stunned that they outdid their forecasted volume.
Automakers were not expecting that high of a sales return because of the extra selling day for January 2015, the snow storms and cold weather that have affected their sales for the past years, the Wall Street Journal reported.
"Consumers feel good because more people are working, the U.S. economy is expanding and fuel prices are low," GM Sales Chief Kurt McNeil said during the carmaker's fourth-quarter earnings report.
GM had the most sales among the three automakers, compensating for its weak sales overseas. GM sales exceeded predictions by 18 percent, Ford by 15 percent and Fiat-Chrysler by 14 percent, according to Reuters.
SUV and full-size truck sales accounted for 69 percent of the January sales of the three Detroit-based automakers, 3 percent higher than last year.
Automakers believe that the low gasoline prices of about $2 per gallon are fueling the strong demand for trucks and SUVs. Most buyers can now afford to buy the more expensive vehicles using the savings they get from fuel.
"Low fuel prices provide a significant boost to consumer disposable income," Ford economist Emily Kolinski Morris told the Wall Street Journal.
Morgan Stanley analysts told the Wall Street Journal that they are looking at an 8.4 percent increase in the combined January sales of the automakers. They also predicted that if the momentum is maintained, there is a strong chance sales will surpass 17 million for the first time in a decade.
Japanese automakers are also on a good pace as Toyota sales climbed by 16 percent, Nissan by 15 percent and Honda by 12 percent.
