US Auto Sales Remain Solid with Positive Outlook
A look at the performance
Pickup trucks have been experiencing solid sales this year, and this is of great advantage for the Detroit Three. Heavy demand for trucks and sports utility car gave boost to General Motors (GM), Ford (F) and Chrysler which gave the three domestic players an edge over foreign counterparts. The top US automaker, General Motors reported 16% year over year increase in sales, followed by the Blue Oval which posted a gain of 14%, and Chrysler which recorded 11% sales rise over last year comparable month.
Ford’s F-Series saw massive sales during the month, so did General Motors Chevy Silverado and Chrysler’s Ram trucks. Ford’s F-Series enjoyed the highest sales gain of 50% over last year’s October sales. Chrysler’s October gain was in line with the sales rise of its Jeep Grand Cherokee, which saw sales jump of 20%, and the recently redesigned Ram which saw 18% sales gain.
These domestic players have been heavily spending on improving their technology to boost the fuel efficiency of their pickups and SUVs. Other than pickups, both General Motors and Ford saw improvements in their midsized sedans segment as well. The top Detroit maker’s revamped Malibu and Chevy Impala sales increased 64% and 40% respectively, while Ford Fusion’s sales went up 71% over last year.
Obviously these American players outpaced their foreign rivals Toyota (TM), Honda (HMC) and Volkswagen. The Japanese players Toyota and Honda do not specialize in trucks and pickups, and are mostly known for their cars. Volkswagen, on the other hand, does not sell pickups in the US at all. So these automakers couldn’t benefit as much as the Detroit giants whose strength lies in pickups. In fact, Volkswagen suffered sales loss of 18% in October. Toyota gained 9% while Nissan (NSANY) saw sales rise of 14% during the month. Though overall sales for Toyota improved, Camry and Scion deliveries dropped 2.6% and 16% respectively.
Industry observers said that the disturbance in the Washington shook consumer confidence a bit in the beginning of the month, but showroom footfall returned to good numbers in the second half of the month. The US government has created an atmosphere of uncertainty, but thankfully it is not showing a severe impact on car buyers.
The bottom line
The holiday season is ahead and automakers are preparing for the year end offers and incentives to clearly their stock. Sales in the last quarter are expected to remain strong to end the year at a solid note. Demand for trucks and pickups shall remain high as the housing sector rebound is there to stay. This is good news for the Detroit auto giants. Foreign automakers might not gain as much as these domestic players, but they are still going to benefit from improving consumer spending as pent-up demand to replace aging cars remains high. In all, the US auto market remains pretty encouraging and exciting both for automakers, investors and buyers.