Nov 01, 2013 01:35 PM EDT

U.S. Government Shutdown Dampens October Car Sales

The 16-day U.S. government shutdown in early October appeared to dampen consumers' appetite for new cars, as five of six automakers reporting monthly sales early on Friday missed analysts' expectations.

U.S. October auto sales for the three Detroit-based automakers rose by double digits from a year earlier, but only General Motors Co (GM.N) beat expectations. Analysts had forecast stronger performances from Ford Motor Co (F.N) and Chrysler Group LLC (FIA.MI), as well as from Toyota Motor Corp (7203.T), Nissan Motor Co (7201.T) and Volkswagen AG (VOWG_p.DE).

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.

October sales dipped to an annual rate of 15.3 million units, according to Morgan Stanley analyst Adam Jonas, compared with expectations of 15.4 million. "The continued weakness ... was primarily driven by the government shutdown impacting consumer sentiment through the first half of the month," he said in a briefing note to clients.

Results at Ford and Chrysler narrowly missed analysts' expectations, as did those at Toyota 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 Nissan was up 14.2 percent to 91,018. Analysts expected 176,815 at Toyota and 93,632 at Nissan.

GM shares were up 1.5 percent at $37.50 at midday on the New York Stock Exchange, while Ford shares were down 1.1 percent at $16.93.


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 (VOWG_p.DE) 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.

VW's U.S. chief, Jonathan Browning, said, "The first half of the month (was) very slow in terms of overall traffic and consumer activity." He said the government shutdown had a broader impact on "consumer confidence in general."

Hyundai Motor Co (005380.KS) said its U.S. sales climbed 7 percent to 53,555 vehicles.

Fuji Heavy Industries' (7270.T) Subaru said sales jumped 32 percent to 34,483.

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.

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