Ford posts big sales jumps for October, as Fiat Chrysler, GM report declines – Chicago Tribune
The drop by two of the Detroit Three reinforces analyst predictions that September’s big gain in U.S. auto sales would fizzle in October. They believe sales will continue to slow nationwide and fewer people than expected will replace hurricane-damaged vehicles in Texas and Florida.
Fiat Chrysler sales fell 13 percent for the month, while GM’s dropped 2 percent. But Ford reported a 6 percent gain that included big increases in F-Series pickups and sales to fleet buyers. Nissan’s sales rose 8 percent largely on an October record for the Nissan Rogue small SUV, with sales up 43 percent.
Industry analysts believe that when all automakers have released their final numbers by Wednesday afternoon, they will show that October sales fell between 2 percent and about 4 percent.
If those predictions are correct, it will mean that a consecutive streak of sales gains for automakers will come to an end after seven years. In 2016, sales hit a record of more than 17.5 million, but most analysts are predicting that this year will come in around 17.1 million.
Replacement of hurricane-damaged vehicles, especially in the Houston area, was expected to push sales up in October. But Jeff Schuster, senior vice president of forecasting for the LMC Automotive consulting firm, said sales through the first three weeks of the month didn’t match forecasts. Sales in Florida rose 5 percent as shoppers finished purchases delayed by Hurricane Irma, but in Houston, they rose only 3 percent as the recovery from Hurricane Harvey wound down.
“There’s a lift, but the lift is not very pronounced, and it looks like based on what we saw from Houston, it’s going to be short-lived,” said Schuster.
Early data show that more buyers than expected replaced damaged vehicles with used ones, Schuster said. Used vehicles normally make up around 70 percent of total sales, but it appears that 80 percent of hurricane replacement buyers bought used, Schuster said. Millions of used cars are returning to the market from leases, and analysts say that is likely to pull sales from new vehicles.
To get to October’s expected sales of 1.32 million vehicles, automakers had to raise discounts on vehicles to an average of $3,901, beating the previous record for October of $3,835 set last year, according to J.D. Power. But the average sale price, including incentives, rose to an October record of $32,185, showing that buyers are willing to load out vehicles with more options.
It’s also taking longer for vehicles to be sold, especially cars. Cars and trucks sold through Oct. 22 spent an average of 75 days on dealer lots, a number not seen since July of 2009, when it hit 80 days just after the Great Recession ended, J.D. Power said.
Schuster said more time on dealer lots is a further indication that sales are slowing. “All in all, it’s still a very solid market. It’s behaving in a way as expected after coming off the year that we had.”
LMC is forecasting that sales will be down slightly next year from this year’s levels.