Industry reports show that automobile sales in the United States slid in October despite consumer discounts being offered on many popular vehicle models.
U.S. auto sales slid by an estimated 6 percent last month, as reported by Reuters.
An auto industry publication, WardsAuto, reported that car sales, on a seasonally-adjusted annualized rate, stood at 17.9 million in October. The figure includes estimate of sales made by Ford, which is expected to make a report later in the week.
Auto sales done last month is expected to show a decline of up to 8 percent when all reports are made.
General Motors seemed to have fared best among the major automakers, with its sales declining by just 1.7 percent. The leading U.S. car manufacturer was able to beat analysts’ expectations, thanks to improved sales of its sport utility vehicles (SUVs), crossovers and trucks. The surge in SUV and smaller pickup sales helped to offset the slide in sedan sales.
The sales figures for October reflect a trend of consumers shifting from sedans to SUVs and pickups in terms of preference. And this is actually a good thing for automakers since it offers them opportunity to make higher profits.
A number of reasons have been given by industry watchers as being responsible for the declines seen in October. One of these is that sales in the same month last year were unusually high, setting up October of this year for disappointing figures.
“October of 2015 was one of the highest sales months in the history of the industry,” said Karl Brauer of Cox Media, as reported by NPR, “so being ‘down’ compared to last year was almost inevitable.”
Brauer also noted that October 2016 had two fewer selling days, compared to the same month last year. He further noted the impact of a hurricane on sales in the East Coast.
“If this is what a ‘down’ market looks like, I’m betting most automakers will gladly take it,” he added.
Michelle Krebs, an analyst at online sales site Autotrader.com, also said the fall in sales was contributed to by budget-conscious consumers who were opting for used cars or postponing purchases of new vehicles.
Fiat Chrysler Automobiles NV sales were down 10 percent. The Chrysler brand tumbled by about 45 percent, while the automaker recorded a somewhat uncommon decline of 7 percent in the sales of its Jeep SUV brand.
The No. 3 automaker in the U.S. market by sales, Toyota Motor Corp, saw an 8.7 percent decline in sales last month.
Slump in auto sales seen in October came despite increased discounts on offer from automakers.
Incentives available in the U.S. auto market last month surged almost 16 percent from the level a year ago, according to TrueCar Inc. They improved to roughly $3,600 per new vehicle.
Judy Wheeler, Nissan brand sales vice president in the U.S., expects sales to improve in the remaining months of this year, going by certain favorable economic indicators. She said 2016 sales will likely come in slightly below the record level seen last year.
Nissan sales slid 2.2 percent in October, even as SUV and pickup sales jumped 13 percent.
However, car companies such as Hyundai, Subaru, Jaguar Land Rover, Mitsubishi and Tesla reported rise in sales last month.
Ford has not reported its sales for October as a result of a fire incident at its Dearborn, Mich. headquarters on Monday. It is expected to report a fall of between 10 percent and 12 percent.