But analysts say sales could drop significantly if automakers and the UAW can't come to an agreement on new contracts for GM, Ford and Fiat Chrysler
DETROIT—Just about everything broke right for the U.S. auto industry in September, as strong consumer demand, easy credit and generous incentives combined for double-digit sales gains at most major automakers.
Right now, the scandal over emissions cheating at Volkswagen is hurting only the German automaker; VW’s sales were up less than 1 per cent over last September. A bigger concern for the industry in the coming months may be an impasse in contract talks between the Detroit automakers and the United Auto Workers, analysts warned.
Ford’s U.S. sales grew 23 per cent in September, Nissan surged 18 per cent and Fiat Chrysler’s U.S. sales jumped nearly 14 per cent. Sales at General Motors rose 12 per cent, while Toyota posted a 16 per cent gain. Honda’s sales were up 13 per cent.
Analysts expected big sales increases because Labor Day was included in September this year versus August a year ago. Labor Day weekend is typically one of the biggest sales periods of the year, as dealers offer discounts to clear cars off their lots before the new model-year vehicles arrive.
Car buying site Kelley Blue Book forecast a 12 per cent increase in sales to 1.39 million cars and trucks.
The U.S. market has remained a bright spot for automakers as the Chinese economy slows. China is still the No. 1 market globally, but sales there were up just 2.6 per cent in the first eight months of the year. U.S. sales grew nearly 4 per cent in that time period.
“The economy still has room to grow and so do auto sales, particularly now that the (millennials) are entering the workforce and starting households,” said GM’s chief economist, Mustafa Mohatarem, in a statement from the company.
But Karl Brauer, a senior analyst with KBB, said sales could drop significantly if automakers and the UAW can’t come to an agreement on new contracts for GM, Ford and Fiat Chrysler. It wouldn’t take long for a strike at their U.S. plants to crimp vehicle availability. On Thursday, the union said Fiat Chrysler’s factory workers rejected a proposed contract; 65 per cent of workers voted against it.
The Volkswagen brand struggled after Sept. 18, when the U.S. government revealed that nearly 500,000 VW and Audi diesels sold in the U.S. had software that let them cheat on emissions tests. Volkswagen halted sales of 2015 and 2016 diesel models of the Passat, Jetta, Golf and Beetle.
VW’s sales were up less than 1 per cent for the month, Diesels accounted for just 11.7 per cent of the company’s total sales, compared with the usual 20 per cent.
But there was a bright spot for VW. Its luxury Audi brand _ which has one model, the A3, involved in the scandal _ saw sales climb 16 per cent and said September was a record month for the brand in the U.S. Sales of Audi’s big SUVs like the Q5 and Q7 were strong, and A3 sales rose 16 per cent.
Here are more details of automakers September sales: