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Car sales rise as shutdown ends

Fri, 01 Nov 2013

DETROIT -- Combined U.S. sales by the Detroit 3 rose 14 percent last month, helped by strong demand for sedans and pickups and an increase in showroom traffic after the partial government shutdown ended.

General Motors reported a 16 percent gain after losing market share in August and September. Sales increased 9 percent for Toyota Motor Corp., 14 percent for Ford Motor Co. and 11 percent for Chrysler Group. Nissan North America and Hyundai Motor America each set October records, while Volkswagen said sales of its namesake brand fell 18 percent during the month.

"When you consider all of the other positives that are going on with fuel prices, low interest rates, housing, autos, the availability of consumer credit -- all of those things that have been driving the economy are still there," Kurt McNeil, GM's vice president of sales operations, said during a conference call with journalists today.

The results from automakers that have released so far are in line with analysts' forecasts of a 12 percent gain in October. Executives and analysts had said the closure of government offices curbed traffic at many dealers in the first half of October before rebounding in the second half of the month.

Volkswagen: VW brand down, Audi up - 1:45 pm ET

Volkswagen Group of America is the only major automaker so far to report a decrease in October sales.

Sales fell 18 percent for the Volkswagen brand -- its biggest decline of the year -- and 9 percent for the company overall. The Audi and Porsche brands each posted 11 percent gains. October marked the 34th consecutive monthly record for Audi.

The group's sales are now down 4 percent for all of 2013 after climbing to a 40-year high in 2012. Executives said the decline is entirely attributable to the discontinuation of the Routan minivan and phase-out of the current-generation Golf.

"After more than doubling our sales over the past three years, it is a significant recognition of the strength of our products that we are on course to close out a second consecutive year with over 400,000 vehicles delivered for the first time in 40 years," Volkswagen Group of America CEO Jonathan Browning said in a statement.

Toyota: Likely drop in market share - 1:01 pm ET

Toyota likely lost market share for the first time since May even as it raised incentives.

It sold 168,976 units in October, up 9 percent. Sales rose 8 percent for the Toyota division and 15 percent for Lexus, the automaker said.

SUVs and other light trucks led the way for Toyota, with a 17 percent increase. Sales of Toyota's car models rose just 3 percent.

The Camry, Prius, Yaris and four of Scion's five nameplates each posted declines. But sales of the Avalon more than tripled, and RAV4 deliveries rose 61 percent.

The newly redesigned Corolla logged a 13 percent gain.

On the year, Toyota sales are now up 8 percent, to 1,867,155. That is about 10 percent less than Ford's year-to-date sales of 2,085,411 units.

Toyota's incentives were 8 percent higher last month than in October 2012, according to That was the second-largest increase among major automakers, behind a 14 percent rise for Ford.

Subaru: 5th consecutive record year - 12:21 pm ET

For the fifth consecutive year, Subaru has set a new annual sales record -- and this time, it did so with more than two months to spare.

With a 32 percent increase in October, the company's year-to-date sales totaled 347,890, 28 percent more than in the first 10 months of 2012. That means it needed only about 294 days to beat last year's 12-month total of 336,441.

So far in 2013, Subaru has outsold the Volkswagen brand by nearly 5,000 vehicles. The Volkswagen brand posted an 18 percent decline for October.

Sales of the Subaru Forester increased 137 percent to 12,581, accounting for more than one of every three vehicles the company sold.

Nissan: New October record - 12:15 pm ET

Nissan said higher demand for its SUVs and crossovers pushed sales up 14 percent to 91,018 vehicles, an October record for the automaker.

Deliveries rose 15 percent for the Nissan division and 5 percent for Infiniti.

Light-truck sales increased 43 percent, versus a 2 percent gain for cars. Sales of the Rogue crossover rose 53 percent as the company sold down 2013 models in preparation for a redesigned, U.S.-built version being introduced this month.

Nissan sold 90 percent more Pathfinder SUVs and 72 percent more Frontier pickups, but sales of its Altima mid-sized sedan fell 12 percent.

At Infiniti, the new Q50 offset declines for six of the brand's seven carryover models.

GM: Gains for all four brands - 10:07 am ET

General Motors led the Detroit 3 with a 16 percent sales increase from October 2012. All four of its brands posted double-digit increases, including a 31 percent gain for Buick.

Sales rose 16 percent for GMC, 15 percent for Chevrolet and 10 percent for Cadillac.

"Chevrolet, Cadillac and Buick-GMC all performed well in the month, and the sales tempo really picked up after the government shutdown ended," McNeil said in a statement. "We are particularly pleased with our truck momentum. Chevrolet and GMC have the newest and best light-duty trucks, sales are accelerating and we are gearing up for the second, third and fourth phases of our strategic truck plan."

Sales of the Chevrolet Silverado and GMC Sierra rose 11 percent from a year ago. GM said the redesigned versions of the trucks accounted for 76 percent of its light-duty pickup sales and that sales of the 2014 models increased 62 percent from September.

GM's retail sales increased 16 percent, while fleet sales were up 14 percent. Retail sales of Chevrolet cars rose 32 percent, as retail deliveries of the Impala nearly doubled and Malibu retail sales jumped 58 percent. Total sales rose 40 percent for the Impala and 64 percent for the Malibu.

Mustafa Mohatarem, GM's chief economist, said that the strength of sales last month was "a testament to the strength of underlying consumer demand."

"People are getting accustomed to some of the noise coming out of Washington," he said.

Mohatarem also said that lower fuel prices don't seem to be having as big of an impact on buying patters as they have in the past, because consumers have gotten used to price fluctuations.

The Chevrolet Cruze had another weak month, as sales fell 16 percent due to lower fleet deliveries. GM said the Cruze posted record October retail sales but did not provide details.

Ford: best October retail results since 2004 - 9:53 am ET

Ford Motor Co. said its sales rose 14 percent as F-series deliveries topped 60,000 for the sixth consecutive month.

Ford's retail sales rose 15 percent to 142,487 vehicles, representing the company's best October performance since 2004. Fleet deliveries accounted for 26 percent of its total sales for the month.

"October was simply an outstanding retail performance, as consumers continued to choose Ford for great fuel efficiency, styling and value at all levels of the market," John Felice, Ford's newly appointed vice president of U.S. marketing, sales and service, said in a statement. "The combination of great new products, such as Fusion and Escape, along with the strength of our dealers helped us achieve our best October retail sales month since 2004."

The Fusion and Fiesta each set October records. Sales were up 71 percent to 21,740 for the Fusion and 9 percent to 4,337 for the Fiesta. F-series sales increased 13 percent to 63,803.

Sales by Ford's Lincoln brand rose 38 percent for the month but are down 3 percent on the year. The MKZ sedan was up 80 percent to 2,909 vehicles.

Ford said the last time it sold at least 60,000 F-series for six months in a row was 2006.

Chrysler: The Burgundy effect - 8:30 am ET

Sales increased 22 percent for the Ram truck brand, 12 percent for Dodge, 7 percent for Jeep and 6 percent for the Chrysler brand. Fiat sales were flat, as the new 500L compensated for a 36 percent decline for the smaller 500. It was the best October for Dodge since 2005.

All carryover Jeep models posted higher sales, and the brand also was helped by the redesigned Cherokee, which arrived at dealers last month after being delayed to resolve quality issues. Dealers have sold 579 Cherokees so far.

"After a choppy start to the beginning of the month, Chrysler Group sales accelerated in the second half of the month with renewed consumer confidence and the launch of our all-new Jeep Cherokee," Reid Bigland, Chrysler's head of U.S. sales, said in a statement. "Following a meticulous focus on quality, our new Jeep Cherokee began shipping to dealers and quickly selling which helped us to achieve our 43rd-consecutive month of year-over-year sales increases."

Sales rose 60 percent for the Dodge Charger and 59 percent for the Dodge Durango. The Durango is the subject of a new ad campaign starring Will Ferrell in character as dimwitted 1970s TV news anchor Ron Burgundy from the upcoming movie "Anchorman 2: The Legend Continues."

Hyundai: 'Post-shutdown' rebound - 6:55 am ET

The automaker sold 53,555 vehicles in October, CEO John Krafcik said in an early-morning Twitter note, attributing the gain to a "post-shutdown rebound." He said Santa Fe sales were up 36, percent, the Sonata gained 18 percent and the Equus jumped 14 percent.

SAAR at 15.4 million

The industry's seasonally adjusted annual selling rate is projected to be 15.4 million, based on an average of 14 analyst estimates compiled by Bloomberg. The selling rate was 15.3 million in September and 14.4 million a year ago.

Automakers and analysts say the numbers will look much better than last month, when sales fell 4 percent year-over-year. That dip, blamed in part on the fact that an earlier-than-usual Labor Day meant sales during the long weekend counted toward August, broke a 27-month streak of gains dating to March 2010.

Average transaction prices for the industry rose 1 percent from a year ago to a record of $30,798 in October, analysts at said. Five automakers -- Chrysler, Ford, General Motors, Toyota and Volkswagen -- achieved all-time highs, with GM up 7 percent from October 2012.

Incentives rose 4 percent from a year ago, TrueCar said. Ford increased its incentives by 24 percent, to an average of $3,086 per vehicle, the most among the eight largest automakers. Hyundai-Kia Automotive upped incentives by 28 percent, to an average of $1,760.

"Expect to see incentives to jump in the fourth quarter -- competition for market share will be fierce," Jesse Toprak, senior analyst for TrueCar, said in a statement. "Average transaction prices continue to hover around record levels thanks to the consumers' demand for vehicles loaded up with options."

The partial government shutdown, which lasted from Oct. 1 through Oct. 16 as congressional leaders deadlocked over how to address the nation's debt ceiling, eroded some consumer confidence early in the month.

"You can't have such a dramatic event that affects all of the government employees and all of the folks who do business with government and not have it affect business," said Kevin Farrish, president of Farrish of Fairfax, which operates a Chrysler-Jeep-Dodge-Ram dealership and a Subaru store in suburban Washington. "Since things got back to business as usual, we saw a spike in sales. Whatever we lost, I think we made it up."

The shutdown affected dealers far from Washington as well, simply by injecting more uncertainty into the economy.

"It's been about an average month for us," said Dave Gibbs, a sales manager at Chevrolet of Gadsden in Alabama. "We had a push there where we really rang the bell, but it's been mostly average. Any time sales are average we look for excuses, so I think the government shutdown did have a bit of an effect on us for sure, but it hasn't been a bad month."

Mike Colias and Sean Gagnier contributed to this report.

The article "Detroit 3 sales rise 14% as industry rebounds from U.S. shutdown" appeared in Automotive News on Nov. 1

By Nick Bunkley at Automotive News