Consumer demand for new vehicles remains strong in the U.S., despite rising interest rates, reported the Demand for new vehicles in the United States remains strong despite rising interest and loan rates, reported Tomomi Nakamura, chief executive of Japan's Subaru Corp.

Nakamura said Americans are feeling an economic slowdown but noted car sales remain strong as supply lags. The automaker expects U.S. new vehicle sales in the Fiscal Year starting in April 2023 to hit 14 to 14.5 million, according to U.S. sales staff.

Auto production remains tight because of shortages of semiconductor chips and other components amid soaring inflation, rising interest rates, and heightened fears of an economic recession. Still, Subaru forecasts operating profits of 300 billion yen ($2.03 billion) in the business year ending March 2023, 50% higher than previous estimates. The automaker attributes the increase to a weak yen and price hikes that offset the impact of rising commodity prices.

The automaker sold about 140,000 cars, 3% higher than the previous year, in the United States in its fiscal second quarter. The automaker expects U.S. sales for the current fiscal year to reach 631,000, up 25% year-to-year, though slightly lower than the previous forecast.

Nakamura warns a tight labor market may make it difficult to expand U.S. production. 

Subaru reported 73.5 billion yen in operating profit for the second fiscal quarter, almost triple the amount from a year earlier.