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Neha Marwah
Neha Marwah
Articles (75) 

Automotive Sales Soften in September, but Future Outlook Remains Bright

October 02, 2013 | About:

Automobile sales for the month of September were a bit depressing, particularly after series of superb months. Sales were affected by the new school year and the Labor Day sales event during which dealers clear their inventory by giving heavy offers. So how did the month turn out to be for the automakers as a whole?

A Look at Some Crucial Numbers

The auto industry experienced sales of about 1.13 million cars and vehicles during the month which pulled down the seasonal adjusted annualized rate to the range of 15.2 million and 15.3 million. Conventionally the third quarter is the strongest quarter for a year as dealers give huge incentives and buyers get lower interest rates. As per Edmunds, this year the auto sector sold around 4 million vehicles during the third quarter, up 9% from last year.

Ford (NYSE:F) was the only automaker among the top three U.S. automakers to report positive numbers as it sold 185,186 vehicles which is an increase of 5.8% over last year. On the other hand, the largest U.S. automaker General Motors (NYSE:GM) suffered an 11% sales decline by delivering 187,195 vehicles. General Motors outperforms Ford generally by a huge margin, but this time the gap narrowed to just over 2,000 vehicles as the top U.S. automaker complained of some supply problem related to its top-selling pickups.

Ford's sales gains are primarily attributable to the popularity of the Edge, Fusion and F-Series pickup which led the U.S. car maker to increase its market share to about 16%. Some have raised questions about Ford’s capability of crossing General Motors to become the largest American automaker. However, industry observers do not think that the Blue Oval will be able to surpass General Motors as its capacity in North America isn’t great enough to outshine the Detroit giant’s lead.

Chrysler, on the other hand, saw a sales gain of 1% by selling 143,017 units which made it experience its best September in the past six years. The Japanese automakers did not see good numbers in September. Toyota (NYSE:TM)'s sales plunged 4.3% as it sold 164,457 vehicles. Honda (NYSE:HMC) saw sales decline 9.9% to 105,563, while Nissan (NSANY) sold 86,868 units, down 5.5% against last year.

These Asian carmakers had recently recovered from the 2011 tsunami. September did not happen to be a good month in general. German carmaker Volkswagen was the biggest loser as sales plunged 12%. The U.S. automakers are making hay as the housing sector is rebounding. Demand for trucks has remained strong which happens to be an area of strength of the Detroit auto giants.

Looking Forward

While the auto outlook is bright, industry observers are wondering how things will proceed as competition is getting tougher with time. Automakers are very confident they will post a solid year despite increased competition. The Detroit Three are benefiting from the rising competition of pickups from business houses. The last quarter of the year is expected to bring more demand for heavy trucks and pickups, giving the American automakers an edge over its Asian counterparts.

Rating: 3.0/5 (2 votes)


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