-Heavier consumer discounts and surging demand to replace hurricane-damaged vehicles gives auto makers momentum
(Marketwatch) -Major auto makers posted mostly solid sales gains in September amid heavier consumer discounts and surging demand to replace hurricane-damaged vehicles, giving the industry relief from months of declining results and some momentum heading into the key fourth-quarter selling season.
General Motors Co. said Tuesday sales rose 12% last month compared to a year earlier to 279,397 vehicles. Ford Motor Co.’s said sales rose 9% last month to 221,643 vehicles.
Both GM and Ford reported sharply higher sales of pickup trucks and SUVs, their most profitable products. The results were lifted by an additional selling day versus September 2016.
Toyota Motor Corp.’s sales surged 15% to 226,632 vehicles, bolstered by strong demand for its revamped Camry sedan. Nissan Motor Co. sales rose nearly 10% to 139,932, a record for the month. Fiat Chrysler Automobiles N.V. said sales dropped 10% to 174,266, hurt by a planned reduction in sales to rental-car companies.
Full industry results for September, due out later Tuesday, are expected to show sales hit their briskest pace of 2017. Auto sales have been lower every month this year as demand cools following a remarkable seven-year run of increasing sales, including a record 17.55 million vehicles sold in 2016.
While auto makers cited replacement demand for the hundreds of thousands of vehicles lost to flooding in metro Houston, heftier discounts also lifted September results. Incentives averaged $4,048 per vehicle last month, a record for any month, according to research firm J.D. Power.
Auto makers have been forced to sweeten deals for consumers to move a backlog of vehicles that have been clogging dealer lots since spring. That made it a good time to buy a new car, as dealers try to clear out older 2017 model-year cars at a time when they would normally be switching over to the next model year.
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Buyers looking to replace storm-totaled vehicles should also continue to boost sales, analysts predict. An estimated 600,000 vehicles will need to be replaced in Texas and Florida, said Jonathan Smoke, an economist at the research firm Cox Automotive. The main sales spike following a hurricane typically occurs during the first two months of recovery.
