The U.S. auto industry has been recovering at a remarkable pace post-recession. In fact the third quarter of the current year was the best in the past eight years in terms of volume. However, the last month of the third quarter, September, saw softer sales figure indicating that the current pace may slow down. Research firm Autodata reports that auto sales for the month of September increased 9.4% to 1.25 million vehicles, missing Reuters' estimates by a whisker.
Diving into the numbers of the Detroit players
The annualized sales rate for September reduced to 16.4 million vehicles in the U.S. compared with 17.5 million vehicles reported in August. However, this is fairly above the sales rate of 15.4 million units reported in the year ago comparable period.
Top Detroit automaker General Motors (GM, Financial) saw its sales jump 19% to 223,437 units, which is close to what analysts had expected. The sales gain is attributable to the company’s powerful pickups Chevrolet Silverado and GMC Sierra’s sales volume that went up 47% to 66,939 units. Sales of its luxury brand Cadillac more or less remained unchanged.
Second Detroit auto giant Ford (F, Financial) saw a dip in its sales volume. The Blue Oval’s sales tumbled 3% to 180,175 vehicles, which is in line with analyst expectation. The fall is attributable to the reduction in production of its top-selling vehicle the F-150 pickup truck, which is one of the key volume drivers. Sales of F-150 pickups fell 1%. As of now the company is getting ready to unveil the 2015 redesigned version of the pickup. Among others, sales of small cars and crossovers sales were disappointing and saw steeper declines. In contrast, Ford’ luxury brand Lincoln’s sales that jumped by a good 13% gave a pleasant surprise.
Chrysler reported a sales increase of 19% by selling 169,890 cars and pickups and thrashed analyst estimates of a 17% sales gain. The credit for sales improvement goes to its Ram and Jeep brands that registered gains of 35% and 47%, respectively. However, Jeep Grand Cherokee’s sales volume dipped 14%.
Performance by other auto players
The top global automaker Toyota’s (TM, Financial) sales figure jumped 2% to 167,279 units. However, analysts had expected the volume to go up by 7%. Toyota’s sports utility vehicles (SUV), crossovers and premium brand Lexus were the key drivers of the improved figures. Sales of its Lexus brand jumped 7%.
Japanese automaker Honda (HMC, Financial) reported a sales hike of 12%. This is driven by the company’s marketing efforts including increased spending on sales incentives. The company’s top-selling models Accord experienced a sales jumped of 25%. Honda’s premium brand Acura’s sales spiked 14%. However, Civic sales dropped 7% during the month.
Nissan (NSANY, Financial) reported sales gain of 19% to 102,955, beating analyst estimate of 15%. Its electric car, the Nissan Leaf, experienced bumper sales with 48% sales hike. However, Infiniti brand partially mellowed down the effect as its sales dropped 13%.
Parting thoughts
Though economic growth has been unpredictable with numerous recalls from several automakers, this has not dented the consumer spirit. Growth might be slowing down, but even with slower growth there’s huge room for demand. Ford's Emily Kolinski Morris rightly sums up the industry sentiment in these words: “The rate of growth in industry sales is beginning to moderate…we are getting closer to what would be a likely plateau in terms of the industry sales pace.” However, this is not a negative signal as the industry remains quite optimistic.
