High consumer confidence and declining fuel prices drove U.S. light-vehicle sales up 6% year over year to 1.28 million units in Oct 2014. Sales on a seasonally adjusted annualized rate (SAAR) basis amounted to 16.5 million units against 15.4 million in Oct 2013. Crossover vehicles and light trucks accounted for most of the improvement with car sales contributing its bit.
Most major automakers impressed with their financial results. Chrysler recorded the maximum year over year improvement, while General Motors Co. (GM) led in absolute figures, despite nominal year-on-year improvement. Toyota Motor Corp. (TM), Nissan Motor Co. Ltd. (NSANY) and Honda Motor Co., Ltd. (HMC) also saw sales growth. Ford Motor Co. (F) suffered a slight decline as plant retooling hurt production volumes.
Now, let us look at the U.S. sales figures reported by the individual automakers.
U.S. Automakers
General Motors recorded 226,819 vehicle sales in October that inched up 0.2% year over year. This is the company’s best October sales in seven years. Retail sales declined 1.5%, while commercial sales went up 30% and fleet sales improved 6%. General Motors launched the Chevrolet Colorado and GMC Canyon in September that boosted results.
The Chevrolet City Express van was also launched last week and should contribute to sales from next month. General Motors will also launch the Chevrolet Trax small crossover early next year.
Ford reported a 2% decline in U.S. sales from the year-ago period to 188,654 vehicles in Oct 2014. The decline was due to plant modification for the manufacture of the new 2015 F-150. Sales of utility vehicles were strong during the month, while truck and car sales declined. Sales volume of the Lincoln brand vehicles surged 24.6% year over year, thanks to the popularity of the new MKC.
Chrysler Group – controlled by Italy’s Fiat S.p.A (FCAU) – recorded a 22% year-over-year rise in sales to 170,480 vehicles. With this, Chrysler’s monthly sales have increased year over year for 55 consecutive months. Not only is this impressive, it is also the best October sales for the group since 2001.
Japanese Automakers
Toyota’s sales increased 6.9% year over year to 180,580 units in Oct 2014. Sales in the Toyota division improved 7.5% to 157,225 units. Lexus’ sales rose 2.8% to 23,355 units.
Honda recorded a 5.8% year-over-year increase in sales to 121,172 vehicles in Oct 2014. Sales in the Honda Division increased 5.5% to 105,745 units, the highest October sales in its history. Further, sales of the Acura Division jumped 7.9% to 15,427 vehicles.
Nissan Motor posted a 13.3% year-over-year increase in sales to 103,117 vehicles in October. Sales in the Nissan division also climbed 14.9% to 94,072 units, which is a record high for the month under review. However, sales of the Infiniti Division went down 1.2% to 9,045 units.
Outlook
Improvement in the U.S. economy, employment rate and consumer confidence, along with falling fuel prices are working in favor of auto sales in the U.S. Moreover, as the pent-up demand is reaching a plateau, automakers are offering large incentives to attract consumers.
Additionally, banks are offering more car loans with lower interest rates and longer repayment periods with a step-up in the general economic situation. Further, the high average age of cars on the U.S. roads is resulting in high replacement demand for cars that have been running since prior to the recession as well as car parts.
General Motors expects industry light vehicle SAAR of 16–16.5 million units this year. Meanwhile, Ford expects industry volumes for the year to be around 16.8 million units.
In the long run, sales are expected to rise on the back of residual pent-up demand and improving macroeconomic conditions. As the automobile industry is a major contributor to U.S. economic growth, improving auto sales will also help in the recovery of the overall U.S. economy.
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