SAAR forecasts scaled back
Toyota Motor Sales, Chrysler Group and the Volkswagen brand led the U.S. industry with subdued sales increases for October as automakers showed the effect of Hurricane Sandy’s pounding of the Northeast and Mid-Atlantic.
Chrysler’s 10 percent gain was its smallest since May 2011, while Toyota’s 16 percent advance followed increases that had averaged 52 percent over the previous five months.
A 22 percent rise by the VW brand was its smallest in 14 months. The German automaker said more than 25 percent of its U.S. dealerships were affected by the mammoth storm that hit the Eastern seaboard on Oct. 29.
Ford Motor Co. said the storm will trim October’s seasonally adjusted annual sales rate by 300,000 units. Before Sandy, analysts had predicted a SAAR in the 14.8 million to 14.9 million range. That would have approached September’s 14.9 million figure as the highest since early 2008.
General Motors, among the first to release results, estimated October’s SAAR would come in at 14.4 million as it posted a 5 percent sales increase.
“Unfortunately, October ended on a down note with Hurricane Sandy causing major disruption throughout the Northeast, which is our strongest performing region with more than 225 area dealers,” said Al Castignetti, vice president of the Nissan Division.
Nissan North America’s 3 percent decline for October marked its worst month since May of 2011, when vehicle supplies were crimped after an earthquake and tsunami in Japan.
Nissan and Infiniti will be offering employee discounts and employee financing to eligible residents in FEMA disaster areas.
Sandy, which churned through an area that generates about 25 percent of U.S. auto sales, disrupted dealers at the month’s end, when car buying tends to accelerate. The Northeast and mid-Atlantic regions are major markets for Jeep, Volkswagen, and many import brands.
GM officials said today half of the company’s dealerships in New Jersey, where damage is extensive, are still without electricity.
Chrysler attributed a 5 percent drop in Jeep sales last month in part on the hurricane. It was the first decline in volume at the SUV brand since January 2010, partly on the hurricane. Its Fiat brand rose 89 percent.
GM’s gain was led by a 15 percent increase at both Buick and Cadillac. Sales at Chevrolet, GM’s biggest division, rose 4 percent while GMC deliveries advanced 6 percent.
Sales of GM passenger cars, aided by new models, advanced 15 percent in October compared with a year ago. Sales of GM’s crossovers were up 3 percent and demand for full-sized pickup trucks rose 8 percent.
GM sales to retail customers were up 7 percent while fleet deliveries dropped 2 percent.
Ford said its sales were mostly flat for the second month in a row, with the Ford division up 1 percent but Lincoln deliveries down 15 percent in October. Ford said its retail sales rose 2 percent compared with last year.
Chrysler said today it had a few dozen dealers in the region that were forced to close for a day or more because of a loss of power or clean up efforts.
“Obviously, sales are postponed and these sales come back relatively quick after housing stabilizes,” said Ken Czubay, Ford’s head of U.S. marketing, sales and service.
Czubay said there are a significant number of vehicles partially or completely damaged by water, and that Ford expects consumers to use insurance proceeds to buy new vehicles.
Many dealerships in New Jersey and New York remain without power and are closed, the National Automobile Dealers Association said Wednesday.
Other automakers are scheduled to report October U.S. sales results later today.
“Year over year, the light vehicle selling rate has increased for eight consecutive quarters without a tailwind from the residential housing sector but that is starting to change,” Kurt McNeil, head of GM’s U.S. sales operations, said in a statement. “If these trends continue, housing may be the final piece of the puzzle that lifts sales above 15 million units on an annual basis
Demand for small, fuel-efficient cars and crossovers is driving the industry’s sales gains, analysts say.
Ford’s small car sales total 25,493 vehicles last month — its strongest October small car sales in 11 years — and an increase of 54 percent over last year.
GM said today it was increasing its year-end inventory target from about 650,000 units, to 660,000 to 670,000 units. The change reflects higher planned stockpiles of new passenger cars, the company said, while GM’s truck inventory target will remain the same.
Easing credit terms, low interest rates, pent-up demand and new or redesigned models are also enticing American consumers to purchase new cars and light trucks despite sluggish economic growth and high gasoline prices.
TrueCar estimates October incentives averaged $2,353 per model across the industry, down 2.9 percent from September and a drop of 5.6 percent from October 2011.
Fleet and retail deliveries are expected to decline from September levels because of lower incentives and the end of many model-year clearance sales, Kelley Blue Book said.