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Auto Industry Survives Storm as August Sales Hold Steady

Hurricane Harvey takes bite out predicted sales.

by on Sep.01, 2017

August new vehicle sales remained steady despite Hurricane Harvey's impact on Texas and Louisiana. Photo credit: Brendan Strong

With the rain from Hurricane Harvey still flooding into dealerships in Texas and Louisiana, new car sales held steady in August as carmakers and analysts assessed the impact of the massive storm.

Analysts initially predicted that August sales would rise as much as 2%, making it the first monthly year-over-year increase in 2017. However, Harvey took out more than a week of sales in Texas, one of the largest markets in the U.S.

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General Motors, Toyota and Audi all reported sales increases for the month, while Ford, Nissan and Fiat Chrysler N.V. said sales dropped. 

GM sales increased by 7.5% during August despite the storm thanks to strong commercial sales. The company’s commercial fleet deliveries were up 19% and the company has gained domestic commercial market share for 13 consecutive months. Total fleet deliveries were up 24%.

“We had a very strong month, and grew our retail and commercial fleet business on the strength of robust crossover sales at all four of our brands,” said Kurt McNeil, U.S. vice president of Sales Operations. “But our focus is on the unfolding crisis in Texas and what we can do to help our customers, employees, dealers and everyone else impacted by the flooding.”

Texas dealerships are being devastated by Hurricane Harvey, and August sales took a hit.

(Automakers expecting to see sales increase in August. To see why, Click Here.)

Audi of America reported an August sales increase of 2.8% to 19,811 deliveries, as the Q7 and the new Q5 and A5 Sportback helped drive consumer demand. Volkswagen of America reported a 9% sales increase as the company continues to pull out of the tailspin set in motion by the diesel scandal of two years ago.

August was the 80th consecutive record sales month for Audi of America. The previous August record was set last year with 19,264 deliveriesThrough August, Audi has now sold 141,606 vehicles in the U.S. this year.

Ford Motor Co. reported its sales slipped 2.1%, but sales of the F-150 increased by 15%, Ford reported.

“We are seeing high demand overall for our F-Series lineup this year, outpacing full size truck segment growth 2 to 1 with a 15% increase for August,” said Mark LaNeve, vice president, U.S. Marketing, Sales and Service.

(Click Here for detail about how Hurricane Harvey is impacting the auto industry.)

Nissan reported a 13% sales decrease in August, while FCA reported an 11% drop. Lexus also reported a sales decline of 0.4%.

Sales of trucks and sport utility vehicles dominated during August as they have for the past several months with small crossover vehicles continuing to lead the way.

Kelley Blue Book estimated average transaction price for light vehicles in the United States was $34,648 in August. Meanwhile ATPs of new vehicles have increased by $243 from August 2016, while increasing slightly from last month, KBB said.

“August revealed mixed average transaction prices across the major manufacturers, although the industry average still managed to rise nearly 1% year-over-year,” said Tim Fleming, analyst for Kelley Blue Book.

(To see why new car buyers are less satisfied with their purchases, Click Here.)

“However, we should note that this is far lower than the 2 to 3% gains in the first half of the year, and prices moved downward in key segments such as full-size trucks and mid-size cars. With incentives still averaging more than 10% of transaction prices, Kelley Blue Book sees clear signs of pressure on new-car pricing in what is the first down year of sales since the recession,” he said.

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