Demand for new vehicles in the United States remains strong despite rising interest and loan rates, the chief executive of Japan’s Subaru Corp said on Wednesday.
“Americans are feeling a slowdown in the economy, but car sales are strong as supply lags,” said Tomomi Nakamura during a news conference after an earnings announcement.
U.S. new vehicle sales in the next financial year starting in April 2023 are expected to be between 14 million and 14.5 million, according to local U.S. sales staff, he said.
Soaring inflation, rising interest rates and growing risks of economic recession in major markets have darkened the demand outlook, although auto production remains tight in general due to chip shortages and COVID-related restrictions.
Subaru is forecasting operating profit of 300 billion yen ($2.03 billion) in the business year ending March 2023, 50% higher than its previous estimate due to a weak yen and price hikes to offset the impact of rising commodity prices. The automaker sold about 140,000 cars in the United States in its fiscal second quarter, up 3% year on year and the only region outside Japan to show growth.
It expects U.S. sales for the current business year to reach 631,000, up 25% year-to-year, although down fractionally from the previous forecast. Still, Nakamura said it would be difficult to expand U.S. production due to a tight labour market.
Subaru reported 73.5 billion yen in operating profit for the July-September quarter, almost triple the figure from a year earlier, mainly helped by a weak yen.
Rival Toyota Motor Corp on Tuesday cut its North America sales forecast for this business year by 6% to 2.45 million vehicles.