General Motors Co. (GM:US), Toyota Motor Corp. (7203) and Ford Motor Co. (F:US) said U.S. sales this month probably will rebound on deferred purchases and replacement demand after Hurricane Sandy disrupted auto purchases in October.
All automakers missed analysts’ average estimates for U.S. sales in Bloomberg’s monthly survey after the superstorm slammed the East Coast during the industry’s busiest time of the month. The three top-selling automakers in the country said they expect a boost in November from owners swapping damaged vehicles and from would-be buyers who couldn’t make it to flooded showrooms.
“Anybody who reads these numbers as ‘the industry is softening’ is incorrect,” Michelle Krebs, an analyst for researcher Edmunds.com, said by telephone. Sales that didn’t occur on the coast in the days before, during and in the wake of the storm “will be made up, and there probably will be a plus- side after that.”
Sandy’s strongest impact occurred on the coastline from New Hampshire to Virginia, putting a halt to car-buying activity at about 1,000 auto retailers in New York and New Jersey alone, dealership consultant Urban Science said. Typically in October, the last seven days generate more than 30 percent of industry sales, according to Santa Monica, California-based Edmunds.
“Despite the impact of Sandy, October was a solid month for Toyota and the industry,” Bob Carter, the company’s U.S. senior vice president, said in a statement. “We look for the market to remain strong in the months ahead.”
U.S. light-vehicle deliveries rose 6.9 percent in October to 1.09 million, researcher Autodata Corp. said in an e-mailed statement. The industry missed analysts’ projections for a 12 percent gain to 1.15 million, the average of nine estimates. Most of the analysts provided their outlook before the superstorm Sandy made landfall on Oct. 29.
Asia-based automakers led by Toyota and Honda Motor Co. (7267) increased sales 8 percent from a year earlier for a combined 44.4 percent of the U.S. market last month, up 0.4 percentage point, according to Autodata. U.S.-based GM, Ford and Chrysler had a combined 44.5 percent market share in October, down from 45.7 percent a year earlier.
Automakers sold light vehicles at a 14.3 million annualized rate, which is adjusted for seasonal trends, according to Woodcliff Lake, New Jersey-based Autodata. The pace fell short of 14.8 million, the average of 16 estimates.
The industry sales rate was 13.3 million in October 2011, when automakers led by Toyota and Honda were recovering from car-supply constraints following Japan’s tsunami last year. The U.S. auto market has been in steady recovery in 2012, culminating in September’s sales pace of 14.9 million, the best since March 2008, Autodata said.
October likely will be a blip for the U.S. industry, which remained on track through the first 10 months of the year to reach 14.7 million vehicle sales, Erich Merkle, Ford’s sales analyst, said on the company’s conference call. That figure includes medium- and heavy-duty vehicles, which typically account for at least 200,000 deliveries per year.
“The first two weeks of November will be a little slower, then picking up toward the end of the month, and getting better than average in December,” said Jesse Toprak, industry analyst for auto pricing and data service TrueCar.com in Santa Monica, California. “By year end any losses should be made up.”
The U.S. averaged 16.8 million annual light-vehicle deliveries from 2000 to 2007, according to Autodata. Sales are on pace to increase at least 10 percent for the third consecutive year, the first such streak since 1973, after a 27- year low in 2009.
GM sales in October rose 4.7 percent to 195,764 from 186,895 a year earlier, according to a statement. That missed the 7.8 percent average estimate of 11 analysts. Deliveries of the Chevrolet Cruze compact car surged 34 percent to 19,121.
Demand “does tend to snap back relatively quickly” after natural disasters, Kurt McNeil, vice president of U.S. sales for Detroit-based GM, said yesterday on the company’s conference call. “We do see both the demand that was in the marketplace coming back and, obviously, a lot of those consumers and businesses will need vehicles.”
Hurricane Sandy’s impact to the industry sales pace was about 300,000 units on an annualized basis, Ryan Brinkman, a New York-based analyst for JPMorgan Chase & Co., wrote yesterday in a research note.
Ford’s light-vehicle deliveries rose 0.3 percent and Chrysler Group LLC’s climbed 10 percent, according to company statements. The carmakers missed 11 analysts’ average estimates for gains of 3.2 percent by Ford and 15 percent for Chrysler.
“We’re finding that the key areas of dealerships being down is concentrated in the New Jersey and New York area, where there was significant flooding in low-lying areas,” Ken Czubay, Ford’s U.S. sales chief, said on the company’s conference call. “To my knowledge, they’re all back up in operation in some form or another.”
Ford deliveries of cars and light trucks increased to 167,947 in October from 167,502 a year earlier, the Dearborn, Michigan-based company said in its statement. Sales of the Focus compact gained 48 percent to 18,320.
Toyota, the No. 3 U.S. seller, said its sales rose 16 percent, trailing the 26 percent gain that was the average of eight analysts’ estimates. Deliveries of the Prius line surged 52 percent to 16,774 and the Camry rose 36 percent to 29,926.
Those results exclude some deliveries in New York and New Jersey that the automaker didn’t receive from dealers that lacked electricity, said Bill Fay, group vice president of U.S. sales for the Toyota City, Japan-based company.
“A lot of that will roll into November and even December,” Fay said on the company’s conference call. Toyota will let customers in the storm-affected region defer vehicle payments, he said.
Chrysler, the automaker controlled by Fiat SpA (F), said sales climbed to 126,185 vehicles from 114,512 in a statement. The Auburn Hills, Michigan-based company’s deliveries of the 300 sedan increased 40 percent to 5,183 and Ram pickups climbed 20 percent to 25,222. The automaker extended its streak of monthly sales gains from a year earlier to 31 consecutive months.
Honda sales gained 8.8 percent to 106,973, less than the 16 percent average estimate of eight analysts. Honda urged dealers to clear stock of Civic compacts because the car is being refreshed late this year after criticism by reviewers including Consumer Reports. Civic deliveries surged 28 percent.
“There are definitely some missing figures” in Honda’s sales report in addition to Toyota’s, said Chris Martin, a spokesman for the Tokyo-based company. The number of vehicles on dealer lots that were damaged “is in the thousands right now. We’re still in the guessing mode.”
Combined sales of Hyundai Motor Co. (005380) and affiliate Kia Motors Corp. (000270), both based in Seoul, rose 2.9 percent to 92,723, falling short of the 13 percent average of six analysts’ estimates.
Volkswagen AG (VOW), with four estimates, was projected to have a 26 percent gain for combined sales of its Volkswagen and Audi brands. Total deliveries for two brands rose 20 percent, the Wolfsburg, Germany-based automaker reported in separate statements.
Sales for Nissan (7201) Motor Co. declined 3.2 percent to 79,685, missing estimates for a 4.6 percent increase, the average of eight estimates. The automaker will offer employee pricing and discounted financing on its namesake and Infiniti brand vehicles for “eligible individuals” in the disaster zone caused by the superstorm, according to a statement yesterday.
The area hit hardest by Sandy accounts for about 40 percent of Nissan’s sales in the Northeast region, said Al Castignetti, vice president of U.S. sales for the namesake brand.
“It’s not lost business,” Castignetti said in a telephone interview yesterday. “It’s deferred business.”
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