U.S. government shutdown dampens October car sales
DETROIT (Reuters) - The 16-day U.S. government shutdown in early October appeared to dampen consumers' appetite for new cars, as seven of the top eight automakers reporting monthly sales on Friday missed analysts' expectations.
Industry sales in October rose 10.6 percent to 1,208,036 vehicles, according to industry research firm Autodata. Analysts had expected a 12 percent increase.
Sales for the three Detroit-based automakers, driven partly by steady demand for full-size pickup trucks, rose by double digits from a year earlier, but only General Motors Co beat expectations.
October sales dipped to an annual rate of 15.23 million vehicles, according to Autodata, the lowest rate since April.
The weaker-than-expected sales rate "was primarily driven by the government shutdown impacting consumer sentiment through the first half of the month," Morgan Stanley analyst Adam Jonas said on Friday in a briefing note to clients.
Analysts had forecast stronger performances in October from Ford Motor Co and Chrysler Group LLC, as well as from Toyota Motor Corp, Honda Motor Co, Nissan Motor Co, Hyundai Motor Co and Volkswagen AG.
GM said October sales climbed nearly 16 percent to 226,402 vehicles from 195,764 a year ago, with all four GM brands reporting year-to-year increases, led by Buick, up 31 percent. Analysts polled by Thomson Reuters, on average, expected GM sales of 211,563.
Results at Ford and Chrysler narrowly missed analysts' expectations, as did those at Toyota, Honda and Nissan.
Ford said October U.S. sales increased 14 percent to 191,985 vehicles, from 168,456 a year earlier. Ford and Lincoln brand sales both rose during the month. Analysts expected 194,301.
Chrysler reported October sales of 140,083, up 11 percent from 126,185 a year ago. Analysts expected 143,536.
Toyota sales rose 8.8 percent to 168,976 vehicles, while Honda was up 7.1 percent to 114,538 and Nissan was up 14.2 percent to 91,018. Analysts expected 176,815 at Toyota, 119,823 at Honda and 93,632 at Nissan.
Hyundai Motor Co said group sales in the United States rose 0.6 percent to 93,309. Hyundai brand sales climbed 6.5 percent to 53,555 while Kia sales dropped 6.4 percent to 39,754.
Analysts said vehicle demand began to pick up after the government resumed working at mid-month.
"The market seemed to respond pretty quickly and the cadence (of sales) seemed to improve," said Itay Michaeli, analyst at Citi Research. "That, I think, is a testament to some of the pent-up demand out there."
Added GM's chief economist Mustafa Mohatarem: "It's like what we've seen with oil prices in recent years where people are getting accustomed to some of the noise coming out of Washington. It may change people's perspective on exactly when to pull the trigger on buying a new vehicle, but we're not seeing much of an impact on the longer-term trend, which has been very positive."
Sales of full-size pickups, buoyed by a steady housing market and lower gasoline prices, continued to show strength in October, although their torrid year-long pace slowed a bit.
Ford's F-series was up 13 percent for the month and up 20 percent for the year to date, while Chrysler's Ram was up 18 percent for the month and 23 percent for the year to date. The Chevrolet Silverado was up 10 percent for the month and 20 percent for the year.
Average transaction prices for all full-size trucks in October jumped more than 5 percentage points from a year ago, to $39,189, according to Kelley Blue Book.
"The truck segment will remain hotly contested through the rest of this year," said analyst Alec Gutierrez of Kelley Blue Book, with GM spending less than Ford and Chrysler to promote its Silverado and Sierra.
Volkswagen AG's U.S. subsidiary said VW brand sales fell 18 percent to 28,129 vehicles. The German automaker's upscale Audi brand reported record sales of 13,001, up 11 percent, with Porsche boosting sales 11 percent to 3,562. Group sales of 44,692 were down 9 percent from a year ago, missing analysts' expectations of 48,654.
Consumer demand for electrified vehicles remain mixed. October sales of GM's Chevrolet Volt dropped 32 percent to 2,022, while Nissan Leaf climbed 27 percent to 2,002.
With the U.S. economy still in low gear and the next round of congressional budget and debt negotiations looming in early 2014, analysts remain mixed in their longer-range outlook.
"If we could ever get some strong economic footing in this country to drive lower unemployment (and higher consumer) confidence, I think we've got a dam that's still waiting to burst," said Karl Brauer of Kelley Blue Book.
GM shares were up 1.2 percent at $37.38 on Friday afternoon on the New York Stock Exchange, while Ford shares were down 1.5 percent at $16.86.
- NOAA employee charged with stealing U.S. dam information
- Autopsy of slain Missouri teen shows close-range gunshot: report
- Special Report: Traffickers use abductions, prison ships to feed Asian slave trade
- Hong Kong protesters march after fruitless talks with government
- Sweden gets two new sightings, as hunt for undersea intruder goes on