Automotive

/

Home & Leisure

Auto sales were strong in October as buyers grabbed fully loaded pickups, SUVs

Russ Mitchell, Los Angeles Times on

Published in Automotive News

SAN FRANCISCO -- October was a good month for auto sales, driven by general economic growth and continued vehicle replacement in the wake of hurricanes in Houston and South Florida.

Sales are expected to slightly top the 1.37 million cars sold in October 2016 once all automakers release the month's results.

Of those that have reported sales figures, General Motors unit sales were down 2.2 percent, and Fiat-Chrysler saw a 13.2 percent drop. But Toyota was up 2.2 percent, Ford was up 6.4 percent, Nissan was up 10.2 percent and Volkswagen was up 11.9 percent.

"Overall conditions remain very, very strong," said Alec Gutierrez, senior analyst for Kelley Blue Book. "Consumer confidence continues to rise. Unemployment is down (to around) 4 percent. There's $2.40-a-gallon gas" on average around the nation.

Still, overall passenger vehicle sales are expected to decline for the full year, after seven straight years of uninterrupted growth.

While the economy is strong, wage growth is not, and that's putting a lid on motor-vehicle sales.

"There's an affordability issue," said Michelle Krebs, executive analyst at Autotrader. "Wages have not kept pace with the price of cars or with the price of everything else," she said.

The average passenger vehicle sales price, about $35,000, is higher than ever, as fully loaded pickup trucks and SUVs continue to sell well among those with good jobs and high salaries. That high average price also boosts carmaker profits.

But major segments of the population are unable to afford new cars. That has always been true for people at the lower end of the income curve, but now it appears to be affecting an entire generation and raising questions about long-term industry growth.

"Millennials have been slow getting into the new-car market," Krebs said. "They're behind on everything, in terms of gaining wealth and such."

...continued

swipe to next page
 

Comments

blog comments powered by Disqus