TALE OF TWO STORMS
FCA bucks trend of declining sales
A hefty drop in US new-car sales during September is blamed on two hurricanes one year apart.
DETROIT: Major automakers on Tuesday posted a hefty drop in US new vehicle sales for September, caused in part by a decline in sales in areas hit by Hurricane Florence and a tough comparison to the previous September when consumers rushed to replace vehicles damaged by Hurricane Harvey.
Fiat Chrysler Automobiles NV (FCA) bucked the trend for the month, reporting a 15% jump in US sales, led by increases in sales of its lucrative Jeeps — especially its Cherokee and Compass models — and Ram pickup trucks.
The solid performance put FCA’s total sales ahead of long-time No. 2 US automaker Ford Motor Co for the month of September.
Hurricane Florence flooded large parts of North Carolina and South Carolina last month, leaving residents to deal with the deluge instead of shopping for new cars.
Sales in September 2017 were boosted by major replacement demand for waterdamaged vehicles following Hurricane Harvey, which had flooded parts of southeastern Texas in August that year.
The seasonally adjusted annualised rate of sales (SAAR) for September hit 18.1 million units in September 2017 — the highest sales pace since 2005.
Despite the sales decline versus the same month in 2017, according to Autodata Corp, which tracks industry sales, the SAAR of US car and light truck sales for September came in at 17.44 million vehicles — the highest sales pace since November 2017. This was above the SAAR of 16.9 million units expected by analysts.
After a strong first half of the year, U. new auto sales are expected to dip in the second half of 2018, as rising interest rates in particular translate into higher monthly car payments and push more Americans toward buying used vehicles.
US consumers last month continued a longstanding trend of abandoning passenger cars for larger, more comfortable pickup trucks and SUVs.
“September was a bloodbath for cars,” Cox Automotive analyst Michelle Krebs told reporters on a conference call. “They dropped like a rock.”
Ford reported an 11.2% drop in sales, with declines in every major category. Sales of sedans were down nearly 26%.
Ford also posted a decline of nearly 9% for sales of its best-selling, and highly profitable, F-Series pickup trucks and a 2.7% drop in sales of SUVs.
In a conference call with analysts and reporters, Ford’s US sales chief Mark LaNeve referred to September as a “tale of two hurricanes.”
“Hurricane Florence was a big factor this month,” he said, adding that post-storm recovery efforts were “moving quickly.”
General Motors Co said its third-quarter sales were down 11.1% versus the same period in 2017. Earlier this year, the No. 1 US automaker stopped reporting monthly sales, arguing that a 30-day snapshot did not accurately portray market trends.
Sales were down at all of GM’s major brands, with particularly sharp decreases for passenger cars.
“Our brands are very well-positioned for the fourth quarter when our next wave of new products start shipping in high volume,” Kurt McNeil, GM US vice president for sales, said in a news release.
GM has high hopes for all-new versions of its Chevrolet Silverado and GMC Sierra pickup trucks.
Toyota Motor Corp said its US newvehicle sales fell 10.4% in September. Sedan sales at the Japanese automaker were off nearly 28%. That included a 17% decline for its flagship Camry mid-sized sedan, which was completely redesigned with the aim of increasing market share.
Toyota’s SUV and pickup truck sales were down 0.3% for the month.
Nissan Motor Co reported a 12.2% drop in sales for September, with a 35.7% decline in passenger car sales more than offsetting a 6.6% rise in pickup truck and SUV sales.
Sales of Nissan’s best-selling vehicle, the Rogue crossover, fell 10.6% in September.
“It was a tough comparison for sales year-over-year, but otherwise the month was very solid for us with some bright spots,” said Billy Hayes, the automaker’s vice president for regional operations in North America. “We’re still extremely bullish and we’re feeling very good about the rest of the year.”
Honda Motor Co said sales were off 7% in September, as a 19% decrease in passenger cars outmatched a 6.3% rise in pickup truck and SUV sales.
Monthly sales of its completely revamped Accord fell by 15%.