Hurricane recovery helps increase US September new vehicle sales

Lloyd Doyle
October 4, 2017

Automakers are reporting healthy USA sales during September. Sales had been weak after a strong run since 2010 that reached in record sales of 17.55 million units in past year.

Analysts predicted that hurricanes Harvey and Irma would deliver automakers their first monthly sales gain in 2017 and they were right.

However others cautioned high inventory levels and record customer discounts remained a concern progressing.

Auto companies had posted a series of declines in sales compared to the year before.

GM inventory fell to 76 days supply last month from 88 days in August, a positive development since analysts have blamed the automaker for much of the industry's oversupply of unsold new vehicles.

Researcher IHS Markit estimates consumers will purchase about 500,000 new vehicles to replace what Harvey destroyed.

The "overall strength of the US economy is the main force driving the market", said GM chief economist Mustafa Mohatarem, with recovery in hurricane-damaged areas "spurring new and used vehicle sales". GM saw sales jump 80 percent for the Chevy Equinox and 51 percent for the Traverse sport utility vehicle. He believes recovery in areas affected by the hurricanes are "spurring new and used vehicle sales". While the company said five vehicles - the Jeep Renegade, Chrysler Pacifica, Ram ProMaster and Ram ProMaster City - "recorded their best September sales ever", fleet sales were down 41 percent from past year in an effort to "reduce sales to the daily rental segment". "With the US economy strengthening, retail sales should remain strong for the foreseeable future". Florida was off because of the lingering effects of Irma but "was coming on strong at the end of the month".

Ford Motor Co's sales increased 8.7 percent in September.

While U.S. sales increased beyond the storm zones, according to automakers and dealerships, much of the September gains followed Typhoon Harvey hit Texas.

Fiat Chrysler Automobiles NV reported a 10 percent decline in sales. German carmaker Volkswagen, for instance, posted a 17 per cent rise in wholesale volumes at 4,603 units in September. Toyota's sales were up 15 percent from one year ago., while Nissan's rose 9.5 percent.

During early trading, Ford shares grew 2.1 percent to $12.34 and GM was up nearly 3 percent to $43.37.

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