Harvey, Irma lift US new auto sales in September

Up to 500,000 cars were damaged or destroyed during Harvey and another 200,000 cars during Irma, according to industry estimates.

This handout picture released on 7 September 2017 by RCI.fm shows damages on the French overseas island of Saint-Martin after high winds from Hurricane Irma hit the island. Picture: AFP.

DETROIT - Major automakers on Tuesday posted higher US new vehicle sales in September, as consumers in hurricane-hit parts of the country, in particular southeast Texas, rushed to replace flood-damaged cars.

Analysts and industry consultants had predicted that hurricanes Harvey and Irma would provide automakers with their first monthly gains in 2017. Sales had been weak sales after a strong run since 2010 that culminated in record sales of 17.55 million units in 2016.

But others warned that high inventory levels and record consumer discounts remained a concern moving forward.

Most of the September sales gains came after Hurricane Harvey hit Texas. Replacing cars during the recovery in southeast Texas and Florida will boost US new and used auto sales through at least November, according to industry consultants.

Up to 500,000 cars were damaged or destroyed during Harvey and another 200,000 cars during Irma, according to industry estimates.

Sales at No. 1 US automaker General Motors Co jumped nearly 12% versus September 2016 as a 43% increase in sales of crossovers and a 10% rise for pickup trucks offset an 11% decline for passenger cars.

GM inventory fell to 76 days supply last month from 88 days in August, a positive development since analysts have blamed the automaker for much of the industry’s oversupply of unsold new vehicles. GM is moving closer to its goal of around 70 days supply by the end of the year.

The “overall strength of the US economy is the main force driving the market,” said GM chief economist Mustafa Mohatarem, with recovery in hurricane-damaged areas “spurring new and used vehicle sales.”

GM said new car sales to consumers were up 14% in the region that includes Texas.

Industrywide, new car sales in the Houston area, the fourth most populous in the United States, jumped 109% in the three weeks after Hurricane Harvey compared with the three weeks before the storm, according to car shopping website Edmunds.

Average new car prices were up just 0.4%, according to consultancy Kelley Blue Book, reflecting “the industry’s trend of slowing demand for new vehicles,” said analyst Tim Fleming.

“Despite pullbacks in vehicle production this year, incentives are still rising and averaging nearly 11% of transaction prices,” Fleming said.

Ford Motor Co’s sales rose 8.7% in September, with those to consumers up 4.4% and lower-margin fleet sales up 25.1%. F-Series pickup truck sales soared 21.4%.

Demand in Houston was “particularly strong,” Ford’s US sales chief Mark LaNeve said on a conference call with analysts and reporters. Sales declined in Florida because of the lingering effects of Irma but “was coming on strong at the end of the month.”

Toyota Motor Corp’s September sales were up nearly 15%, with strong gains for SUVs and trucks. Sales of the revamped 2018 Camry sedan were up 13% in the vehicle’s first full month of sales.

Fiat Chrysler Automobiles NV reported a 10% decline in sales, driven by a 41% drop in lower-margin fleet sales. The company is cutting back on fleet sales.

FCA said retail sales to consumers rose 0.3% from with September 2016.

Nissan Motor Co Ltd’s sales rose 9.5% in September.

Ford shares were up 2.1% at $12.35 and GM was up 2.6% at $43.25.