The U.S. automakers, General Motors (GM, Financial), Ford (F, Financial) and Chryslers reported their sales numbers for the month of October. Share traded in the red as there were mixed results. However, the overall performance by all the automakers came in positive. A brief look into the sales figure would give a better idea as to what happened.
What do the numbers say?
Conventionally October is a slow moving month with dull auto sales compared with other months of the year. Buyers prefer taking a break right after a busy summer season. But good numbers this October is a healthy sign of steady demand. Automakers sold 1.28 million cars in the U.S. in October, thanks to the fallen gas price that reduced to $3 a gallon – something that has not happened in years. Sales volume were 6.1% higher than last year figures. According to Autodata, the seasonally adjusted annual rate came in at 16.46 million units.
2015 Jeep Cherokee, Picture from Jeep
What happened with the Detroit Three?
The top U.S. automaker General Motors reported a marginal sales rise of just 417 vehicles to 226,819 units for the month compared with what it sold a year earlier. The growth rate, as visible from the negligible rise, almost stagnated for the carmaker. The American economy has steadily improved after the recession, and now General Motors has plans for expansion. Fuel prices have lowered, the unemployment rate has fallen, and consumer confidence is quite in shape. All this things suggest a positive scenario for expanding footprint and introducing new products. General Motors is banking on its pickups trucks and SUVs to get the numbers. The automaker also has a new models in the pipeline.
While General Motors managed to sell a bit more than a year ago, Ford saw sales drop of 2% in October. The company delivered 188,654 vehicles in the last month. Lincoln brand saw its sales rise by a good 24.6%, but the volume is so small that it was overshadowed by the weakness in the sales of the Ford brand that makes for the majority of Ford sales. Ford brand sales plunged 2.7% to 179,771 units. Sales of cars and sales weren’t good during this period, however utility vehicles sales saw an uptick. Ford said that it had expected volumes to go down, but with continuous focus on its Fusion model the company sees sales improving in the future.
2015 Lincoln MKZ, Picture from Lincoln
The third Detroit automaker Chrysler had a phenomenal month. Sales volume rose by a staggering 22% over last year. It sold 170,480 vehicles during the month, reporting the highest October sales since 2001. The growth was led by the Jeep brand that saw its sales spike by an incredible 52%. Ram trucks were also in good momentum with 36% sales gain. Chrysler’s U.S. sales head Reid Bigland said that the extremely popular Ram trucks, the all-new Jeep Cherokee, and the mid-sized sedan Chrysler 200 have been quite crucial to its robust growth.
Other players
While Detroit automakers reported mixed numbers, foreign automakers such as Toyota (TM, Financial), Nissan (NSANY, Financial) and Honda (HMC, Financial) saw good improvement in sales. Toyota’s sales jumped 6.9%, Nissan’s rose 13%, and Honda’s 5.8%. The rise was driven by solid demand for sports utility vehicles. Toyota has been able to maintain its market share in the U.S. market, and this is helping the Japanese carmaker to gain ground on its two American rivals -- General Motors and Ford.
Parting thoughts
On the whole, October was a stellar month for the American automotive industry. The performance indicates that 2014 is going to end at a solid note posting the highest sales post-recession. Americans have always had a soft spot for cars. And declining gas prices triggered the demand even further.
