This article is being republished as part of our daily reproduction of WSJ.com articles that also appeared in the U.S. print edition of The Wall Street Journal (November 2, 2017).
Continue Reading Below
The auto industry's hot streak continued in October with car companies achieving a far-higher sales pace than initially expected for the month, setting the stage for a strong finish in 2017.
Auto makers have been banking on robust fourth-quarter sales after a sluggish summer. September's performance -- fueled by Labor Day deals and hurricane-related replacement sales -- was abnormally strong, and October's remained near that pace, according to preliminary estimates published Wednesday by Autodata Corp.
Nearly all major auto makers posted considerable gains, sending the closely watched seasonally adjusted annual sales rate to 18.1 million, Autodata said, outpacing the prior October's 17.8 million and initial analyst expectations for a 17.5 million SAAR. Full-year auto sales through 10 months are holding close to the pace set a year ago.
Autodata, which excluded BMW AG from estimates because of delays in the German auto maker's reporting, said sales volume slipped 1.3% in October to 1.35 million. The modest decline is seen as a positive development, however, because there was one fewer selling day this year compared with October 2016 and analysts had been expecting a bigger year-over-year setback.
The fourth quarter has been an important period for auto makers during the past two years, both of which represented consecutive records for U.S. sales. The October-through-December period set the fastest sales pace in 2015 and 2016, replacing the summer selling season as the prime car-selling period.
Continue Reading Below
Ford Motor Co. sales chief Mark LaNeve said strong underlying economic factors -- including wage growth and low unemployment -- are helping to keep showrooms busy and should result in a "plateau" of industry sales at near-record levels in coming months. Ford's sales volumes and profit have been buoyed as sales of the F-Series pickup truck sizzle amid low gasoline prices.
"Consumer confidence is up, the stock market is up -- that really helps the psyche of our buyers," Mr. LaNeve said on a conference call. "It's still a backdrop of a very strong environment."
Judy Wheeler, Nissan Motor Co.'s U.S. sales chief, said she expects auto makers will get "extremely aggressive" in the fourth quarter, with most car companies' fiscal-year calendars ending in December.
"We just need to make sure that we properly sell down our 2017 model-year vehicles and transition to our 2018 vehicles as we move into the last quarter," Ms. Wheeler said. "We want to be as aggressive as we can and deliver the right level of profits to the company."
J.D. Power said the transition to 2018 model-year vehicles has been sluggish this year. To date, sales of 2018 model-year vehicles make up 29% of all retail sales, a sign that auto makers might pile on incentives to get 2017 model-year vehicles off dealer lots.
Auto makers offered an average discount of $3,902 per vehicle in October, a record for the month, J.D. Power said.
Ford was the lone Detroit competitor posting an October gain, reporting a 6.4% increase compared with the same month in 2016, selling 199,698 light vehicles. Toyota Motor Corp., Honda Motor Co. and Nissan also recorded year-over-year gains.
General Motors Co. and Fiat Chrysler Automobiles NV, however, reported declines. GM said sales fell 2% in October to 252,813 vehicles because of a decline in sales of passenger cars, reflecting a preference for trucks and sport-utility vehicles. Fiat Chrysler said sales fell 13% to 153,373 vehicles in October, a decline driven by a modest drop in retail sales and a reduction in sales to fleet buyers, such as rental-car companies.
Nissan said its sales increased 8.4% compared with the prior October, while Toyota reported a 1.1% increase. Both companies cited strong sales of smaller crossover SUVs -- such as the Nissan Rogue and Toyota RAV4 -- as a reason for gains. Honda sales rose nearly 1%, with the Civic compact car, the auto maker's best-selling vehicle in October, notching double-digit gains.
--Mike Colias contributed to this article.
Write to Adrienne Roberts at Adrienne.Roberts@wsj.com
(END) Dow Jones Newswires
November 02, 2017 02:47 ET (06:47 GMT)