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Automakers on Tuesday reported stronger U.S. sales in September, as the industry secured its first monthly gain of 2017.
Analysts expected to see an increase in sales last month with some help from Labor Day deals. Cooler demand has allowed inventory levels to grow, and automakers are leaning more on incentives to sell excess supply. Forecasts also called for a modest increase in sales in Houston, where residents are beginning to replace vehicles damaged by Hurricane Harvey. However, Hurricane Irma appeared to weigh on September sales in Florida.
Automakers sold 6.1% more vehicles in September compared to the same month last year, according to a tally by Autodata. The seasonally adjusted annual rate hit 18.57 million vehicles, by far the best mark of 2017.
Trucks were a popular segment during the month. General Motors (GM), the nation’s largest automaker, reported a 12% increase in monthly sales versus September 2016. The company sold 279,397 vehicles, driven by crossover and truck sales at Chevrolet and GMC. Sales of the Chevrolet Silverado, which is down slightly on the year, soared 21.7%.
“The overall strength of the U.S. economy is the main force driving the market,” GM Chief Economist Mustafa Mohatarem said, adding that the recovery from Hurricanes Harvey and Irma will also spur new- and used-vehicle sales. “With the U.S. economy strengthening, retail sales should remain strong for the foreseeable future.”
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GM shares rallied 2.7% to $43.28, hitting another intraday high in recent trading.
Ford also saw a big boost from pickup trucks. Sales of F-Series trucks surged 21.4%. The company’s total sales rose 8.7% year-over-year to 222,248.
Fiat Chrysler’s (FCAU) sales dropped 10%, reflecting double-digit declines for Chrysler, Dodge and Fiat. Ram truck sales remained level.
Toyota (TM) recorded a sharp increase in sales of 14.9%, saying its results were driven by trucks and SUVs. Nissan sales grew 9.5%. Volkswagen, which has been mired in a diesel emissions scandal, logged a 33% increase in U.S. sales. Volkswagen's Audi lifted sales by 9.6%. Mercedes-Benz and BMW posted modest declines.
Car shoppers typically find favorable discounts in September, when automakers offer Labor Day incentives and other deals on outgoing 2017 models. Analysts have closely watched incentive trends this year in particular, given the decline on consumer demand. ALG, TrueCar’s (TRUE) research unit, said discounts rose 1.5% to $3,742 per vehicle last month. Incentive spending was 11.5% of average transaction prices, up from 11.2% a year ago.
In Ford’s case, the company sold more vehicles than its internal projections and expects to recover some production as a result, according to Mark LaNeve, vice president of U.S. marketing, sales and service.