The American automotive industry witnessed record October sales and appears to be on track to finish the year at a stunning note. The Detroit automakers, General Motors (GM, Financial), Ford (F, Financial), and Chrysler saw double-digit growth, giving their best October in a decade. Heavy demand for larger vehicles, declining fuel prices and the fact that October had five weekends supported the strong growth. According to Autodata Corp., the seasonally adjusted annual sales rate for light vehicles stood at 18.2 million units for the month.
The U.S. car market went into recession in 2009, the year when its auto sales plunged massively to 10.4 million vehicles. The industry has come a long way since then. Auto sales rose 13.6% year over year. That compares with analyst expectation of 8% to 12% growth. Here’s a comprehensive look at the performance of the automakers.
The Detroit Three celebrate their October stats
The largest U.S. automaker, General Motors, witnessed a 15.9% sales hike to 262,993 vehicles. The sales gain is attributable to the robust demand for trucks, crossovers and fleet vehicles. The carmaker’s market share expanded to 18% in the month. This is the best October General Motors has seen since 2004. Sales of Silverado pickups, Chevrolet Equinox and the lower-priced Malibu sedan proved to be the strongest. Though Cadillac luxury sedans could not put up a good show, SUVs compensated for their soft numbers.
Ford, the second largest Detroit automaker, witnessed sales gain of 13.4% year-over-year to 213,938 vehicles. The sales gain was led by solid demand for the Explorer SUV, Focus Sedan and Mustang sports car. Sales of Explorer and Edge climbed 30% and 39%.
Chrysler continues to keep its streak alive as it posted yet another month of sales gain. October completed the company’s 67th straight month of sales increases. The company sold 195,545 vehicles this month, up 14.7%. The Jeep brand witnessed 33% sales increase. Chrysler saw eight of its vehicles recording their best October figures: Dodge Challenger, Dodge Journey, Dodge Charger, Jeep Cherokee, Jeep Patriot, Jeep wrangler Jeep Compass, and Ram ProMaster.
Toyota sees strong growth
Toyota (TM, Financial) registered its best ever sales for the month, up 13% from the same period last year to 204,045 vehicles. Sales of its luxury brand, Lexus, registered stunning growth with its SUVs a 34% rise in sales. Toyota's U.S. general manager Bill Fay said, "October was a huge month for the industry, smashing expectations and continuing its hot streak."
Honda (HMC, Financial) also experienced an increase in its sales volume that jumped 8.6% to 131,651 units as its Accord and Civic sedans recorded double-digit growth for October. Nissan (NSANY, Financial) sold 116,047 light vehicles, thereby finishing the month with 12.5% higher volumes as compared to the last year same period. The combined sales of Nissan crossovers, trucks and SUVs surged a record 26%.
The U.S. economic data for the third quarter indicated a slowness in consumer spending. As such, there were concerns over October numbers, especially after September saw a tiny increase in consumer consumption. However, the stunning October stats alleviated worries regarding a sluggish economy on the back of stagnating consumer spending. Analysts are highly optimistic about 2015 and feel that the wide array of incentives and favorable financing options should give a good boost to the overall American auto industry.
Disclosure: I have no positions in any stocks mentioned in this article.
