VOL. 36 | NO. 43 | Friday, October 26, 2012
Most automakers report sales jumps despite storm
DETROIT (AP) — Most major automakers reported sales increases in October despite losing at least three days of business to the punishing rain and wind from Superstorm Sandy.
Toyota said its sales rose almost 16 percent for the month, while Volkswagen reported another strong month with sales up 22 percent. Honda sales slowed from double-digit growth earlier in the year to 8.8 percent, while Chrysler sales rose 10 percent. General Motors was up 5 percent and Ford rose slightly.
Of major automakers, only Nissan reported a decrease, 3.2 percent, as Sandy pounded the Northeast, the company's top-performing region.
Yet the results show that Americans continue to buy new cars and trucks at a strong pace. Chrysler predicted an annual sales rate of 14.7 million for the U.S. industry in October, making it one of the year's strongest months. Auto sales ran at an annual rate of 14.3 million through September.
Industry analysts estimated that the storm cut U.S. sales by about 20,000 cars and trucks in October as buyers hunkered down for the storm. But the Nissan brand, which gets 27 percent of its U.S. sales from the Northeast, was hit particularly hard.
"It is absolutely a hurt on us," said Al Castignetti, vice president of the Nissan division. As of Wednesday, 65 Nissan dealers in New York, New Jersey and Connecticut were closed due to lack of electricity, and they account for 40 percent of the region's sales, Castignetti said.
In past storms, sales were postponed, but they typically recover quickly after people's lives stabilized, said Ford U.S. sales chief Ken Czubay.
He also said there were a "significant number" of vehicles damaged by flood waters, and that could also boost sales in November. "Typically after the insurance companies come in, people use those proceeds to buy new vehicles, which they need to get back and forth to continue their lives," Czubay said.
Many automakers announced discounts in the storm-ravaged region, including Nissan, which is offering the same prices it gives to employees.
Volkswagen said one-quarter of its dealerships were affected by the storm, but it still delivered its best October in nearly 40 years at just over 34,000 vehicles. Sales were led by the Passat midsize sedan, which was up 66 percent.
Chrysler said it sold 126,000 cars and trucks for the month, led by the Ram pickup, which was up 20 percent, and the Dodge Caravan van, which saw sales rise 49 percent.
At Ford, sales increased only 0.4 percent to 168,000 cars and trucks. The company said F-Series pickup trucks, the most popular vehicle in the nation, had their best October in eight years.
At GM, sales rose to nearly 196,000 vehicles for the month, led by the Cruze and Sonic small cars. Cruze sales were up 34 percent, while Sonic sales rose 43 percent.
Toyota said its sales rose to 155,000 vehicles. It will release more data later in the day.
At Nissan, the company said October ended on a down note with Sandy causing major disruption in an area where it has 225 dealers. The company's Nissan and Infiniti brands sod nearly 80,000 cars and trucks, down from just over 82,000 a year earlier.
Industry analysts were expecting an annual sales rate in October of 14.7 million to 14.9 million, but that was before Sandy hit Monday.
The storm could cut sales by 1 percent to 3 percent, or about 20,000 vehicles, said Jeff Schuster, senior vice president of forecasting for LMC Automotive, an industry consulting firm. Schuster said any lost sales would likely shift to November, boosting totals for that month.
But Chrysler U.S. sales chief Reid Bigland, who doubles as head of the Dodge brand, said in a statement that the company posted its 31st straight month of year-over-year sales growth even with the storm. Chrysler has revamped nearly all of its models in an effort to boost sales.
LMC predicts that all automakers sold about 1.1 million vehicles during October, up 11 percent from a year ago, as the industry continues its slow recovery from the Great Recession.
But Jefferies & Co. analyst Peter Nesvold told investors in a note that Sandy could cost the industry sales of 100,000 cars and trucks in October. He still predicted an annual rate for the month of 14.7 million to 14.9 million, and he raised his full-year forecast to 14.4 million from 14.2 million based on the strong October. Nesvold also said the lost sales should return in November.
U.S. sales have been recovering from a 30-year low of 10.4 million in 2009 when credit froze, unemployment leaped and few people were buying cars. But the numbers are still far short of the recent peak of around 17 million in 2005. Analysts predict the country could reach 15 million in sales next year, which they consider about normal.
Auto sales have been a bright spot in the U.S. economy all year, staying relatively strong despite a mixture of good and bad economic news.