SOUTHFIELD, Mich. — Auto sales hit overdrive in September, fueled by cheap credit, good deals and relatively low gasoline prices, causing General Motors and Fiat Chrysler to project a faster sales pace than the industry has seen in a decade.
GM, Ford and Nissan beat analysts’ estimates, while Fiat Chrysler Automobiles, Toyota and Honda met expectations for healthy sales gains last month. Labor Day deals helped give sales a boost, while continued low interest rates and gas prices primed the pump for auto sales, which could top an annualized selling rate, adjusted for seasonal trends, of 18 million vehicles, according to GM and Fiat Chrysler.
“The U.S. is adding jobs, disposable income is rising, energy prices and interest rates remain low and business continues to invest, but the fact remains this has been a slow recovery,” Mustafa Mohatarem, GM’s chief economist, said in a statement. “The economy still has room to grow and so do auto sales.”
America’s love of pickups and SUVs, fueled by available credit, affordable fuel and new technology, is helping push auto sales to the highest level in more than a decade. Industry researcher LMC Automotive is raising its full-year light-vehicle sales forecast by 100,000 to 17.2 million. TrueCar Inc. boosted its 2015 estimate by 200,000 to 17.4 million, a level that would match the record set in 2000.
Autos are selling well because “it’s cheap to run ’em, it’s cheap to buy ’em and there’s more people with jobs, so more people need ’em,” Mark Wakefield, managing director and head of the automotive practice for consultant AlixPartners, said in an interview. “In the last 12 months, $98 billion has gone into people’s pockets strictly because of gas prices going down. You’re seeing the impact of that.”
Volkswagen of America, embroiled in a scandal over doctoring diesel engines to avoid pollution controls, even managed a sales gain of 0.6 percent, defying analysts predictions of a 6.7 percent decline for the brand. Combined with its Audi luxury line, Volkswagen sales rose 6.3 percent. VW has been forced to stop selling its vehicles equipped with the 2.0-liter TDI engine in which regulators say the company used a “defeat device” that allowed them to spew pollution at up to 40 times the legal limit.
GM sales rose 12 percent, exceeding estimates for a 9.3 percent gain, while Ford’s light-vehicle deliveries jumped 23 percent, topping projections for a 19 percent increase. Nissan sales climbed 18 percent, compared with a 13 percent average estimate.
Fiat Chrysler kept its sales streak alive as U.S. deliveries rose 14 percent in September, powered by Jeep’s 40 percent rise. The Italian-American automaker reported sales of 193,019 vehicles last month, matching the gain predicted by the average of eight analyst estimates compiled by Bloomberg. Jeep sport utility vehicles, led by a record for Cherokee, had their second best month ever as Fiat Chrysler deliveries gained for the 66th straight month.
The industry may show a 13 percent jump in car and light- truck deliveries for an annualized rate, adjusted for seasonal trends, of 17.7 million, the average of 12 analyst estimates in a Bloomberg survey. The highest was for an 18 million pace.
Fiat Chrysler forecast an 18.4 million selling pace for the month, including medium and heavy trucks that typically account for at least 200,000 deliveries. GM projected an 18.3 million pace for light vehicles. That would be the fastest selling rate since July 2005, when is reached 20.9 million when Ford and DaimlerChrysler followed GM with offers of employee pricing for all customers.
“We’re above the clouds, we don’t know how high it will get exactly, but we’re definitely above the clouds,” Wakefield said. This will continue “next year and the year after and then we have a dip starting in 2018, but more meaningfully in 2019.”
GM said sales rose to 251,310, led by its Silverado, Sierra and Colorado pickups. The Chevrolet Malibu sedan had its best September retail sales in a decade backed by a 38 percent gain. Malibu sales, including those to fleets, rose 12 percent to 17,066. GM has been paring its fleet sales this year.
Sales of Ford’s F-Series pickups rose 16 percent as the automaker finally began stocking dealers with full inventory after a nearly two-year changeover to the aluminum-bodied truck. Sport utility vehicles were Ford’s top gainers, with the redesigned Edge up 33 percent and the Explorer soaring by 38 percent. Lincoln had its best month in eight years with a 20 percent gain driven by the MKC and MKX SUVs. Sales of cars rose less, with the Focus compact down 13 percent.
Nissan set a September sales record, driven by a 45 percent jump in sales of the Rogue small utility. Nissan’s best selling car remained the Altima sedan, which saw a 12 percent increase. The Japanese automaker’s Infiniti luxury line gained 30 percent, powered by a 76 percent rise in sales of its QX60 SUV.
Toyota sales rose 16 percent and Honda’s gained 13 percent, both matching analysts’ estimates. Toyota’s traditional SUVs had a strong month, with the 4Runner rising 32 percent and the big Sequoia soaring 36 percent. Sales of Toyota’s top seller, the Camry mid-size car, rose 21 percent. Honda set a September sales record, led by light trucks, such as the Pilot SUV, which rose 31 percent. Honda’s Acura brand rose 6.3 percent, led by the TLX sedan and RDX crossover.
VW, like other automakers, benefited from Labor Day weekend, a traditional car-shopping holiday which last year fell in August. The holiday came before VW was engulfed in the scandal over its diesel engines.
Volkswagen is the subject of numerous government investigations and lawsuits since the Environmental Protection Agency said Sept. 18 that the largest European automaker admitted using a so-called defeat device that turned off emissions controls when vehicles weren’t being put through official tests. The revelation undermined VW’s diesels, which were one of its few strengths, along with a critically acclaimed line of Golf cars. Martin Winterkorn stepped down from his role as chief executive officer of the automaker.
“We would like to thank dealers and customers for the support of the Volkswagen brand,” said Mark McNabb, chief operating officer for Volkswagen of America. “Volkswagen will continue to work diligently to regain trust and confidence in our brand.”
Audi sales rose 16 percent to 17,340, the brand’s best September in the U.S. The compact A3 was the line’s only model that is sometimes equipped with the 2.0-liter diesel engine implicated by the cheating. A3 sales rose 16 percent to 2,712.
VW had been counting on fuel-efficient and fun-to-drive diesel-powered cars to turn around its slump amid the U.S. pickup and SUV boom. Now its smaller diesels have been pulled from dealer lots while engineers work on a fix.
VW’s U.S. sales have dropped for two straight years, hurt by an aging lineup that lacks a mid-size SUV. To try to more than double U.S. sales and meet a 800,000-vehicle sales goal by 2018, the automaker has relied on leasing to ensure a stream of repeat customers when their contracts end in 2017 — about the same time the fruits of its product-line reformation would hit dealers.
Leases, some as cheap as $39 or $49 a month, have accounted for about 40 percent of the company’s deliveries — more than Porsche and about double the rate of most mainstream brands.
Though Baum & Associates figures show Americans buy more than three times as many hybrids and electric models as diesels, hybrid sales have been slowing and actually slipped last year as gasoline prices fell. By contrast, sales of diesel vehicles have grown for eight straight years.
Shoppers predisposed toward diesels are more likely to delay a purchase, if possible, than to choose an electric vehicle or a hybrid instead, Jeff Schuster, senior vice president at LMC Automotive in Troy, Michigan, said in an interview.
“Those buyers share an interest in increased fuel economy, but that’s where it stops,” he said. “Those diesel buyers are going to be left hanging for a little bit.”