Forecast: October Sales Steady Before End-of-Year Spike

A WardsAuto forecast calls for U.S. automakers to maintain solid year-over year gains in October, delivering 1.28 million light vehicles over 27 selling days.

The resulting daily sales rate of 47,356 units represents a 6.5% improvement over same-month year-ago (also 27 days) and an 8.2% month-to-month drop from September (24 days), in line with seasonal expectations.

The forecast equates to a 16.4 million-unit SAAR, a tick above the 16.3 million year-to-date SAAR through September.

October sales also are in line with the current 16.4 million consensus forecast for full-year 2014 deliveries. However, several automakers have indicated they believe the industry will see stronger SAARs in the final two months of the year that could boost LV sales closer to 16.5 million units.

Incentive spending so far this month seems to be of the same order as September, with falling unemployment continuing to be a positive factor in WardsAuto’s forecast. The Bureau of Labor Statistics reported a 5.9% unemployment rate in September, marking the first month since July 2008 the jobless rate was lower than 6%.

Consumer sentiment as measured by the Conference Board Consumer Confidence Index, declined in September, after four consecutive months of improvement. However, the Thomson Reuters University of Michigan Survey of Consumers showed consumer confidence in the economy reaching its second highest level of the past seven years.

Automakers finished September with 3.3 million units of inventory, up 100,000 units from the beginning of the month, equating to a 64 days’ supply going into October.

However, expected October production, paired with the forecasted DSR, will leave the industry with a 72-days’ supply at the end of the month, with nearly 3.4 million vehicles in stock.

WardsAuto is forecasting a 4.8% year-over-year rise in Detroit Three daily sales – accounting for 45.3% of industry LV volume.

The gain largely is a result of an expected 21.5% jump in Fiat Chrysler Automobile’s sales this month, equating to a 13.2% share compared with FCA’s 11.6% share a year ago. General Motors also is expected to finish on the plus side, with a 3% improvement over year-ago, on 233,000 LV sales. Ford, however, is expected to see its DSR fall 5.4%, as the company’s market share slips nearly two points from year-ago to 13.8%, with projected sales of less than 177,000 LVs.

Ford and Volkswagen are the only large-volume automakers expected to experience year-over-year declines. WardsAuto is calling for 26,300 VW-brand deliveries in October, a 6.4% decline in DSR. The German automaker’s Audi brand, however, continues to move in the opposite direction, with an expected 19.2% improvement on 15,000 luxury-vehicle sales.

BMW and Daimler, also should improve on year-ago, with respective gains of 5.2% and 8.5%.

Overall, European brands are projected to outsell same-month year-ago by 4.2%.

Asian automakers, meanwhile are expected to continue to outpace the industry, with the group’s collective sales rising 8.6% over like-2013 while accounting for 44.8% of total LV deliveries.

Toyota, which fell below expectations and failed to displace Ford as the No.2 vehicle seller in September, should take that mantle in October, inching ahead of Ford with 180,000 LV deliveries and a 14.1% share.

Honda sales, meanwhile, are forecast at 123,000 units, up 7.2% over year-ago.

The WardsAuto outlook calls for Nissan to finish the month as the No.6 automaker, ahead of Hyundai-Kia, with sales of 103,000 LVs, compared with the South Korean automakers’ projected 98,000 combined deliveries.
At forecast levels, year-to-date LV sales through October would come to 13.65 million units, up 5.5% over same-period 2013.

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