Ford Motor Co. and Chrysler Group LLC overcame a quirk in the industry sales calendar to post surprise U.S. gains for September while future growth may be challenged by the government shutdown that began today.
Ford said sales of its cars and light trucks rose 5.7% to 184,452 and Chrysler deliveries climbed 0.7% to 143,017. The companies exceeded analysts’ average estimates for little change in Ford sales and a 2.8% decline for Fiat SpA-controlled Chrysler in a survey by Bloomberg News.
Analysts are predicting industry sales slipped 3.8% in September, the first drop in 27 months. Deliveries for the first two days of September, including the Labor Day holiday, won’t contribute toward automakers’ tallies because they were counted in August figures. The U.S. government’s first partial shutdown in 17 years now will test consumer confidence that’s crucial to big-ticket purchases, including new cars and trucks.
“Even with the reduction in government spending that we had earlier this year, the sales numbers for autos have been pretty good,” Warren Gibbon, a Boston-based vice president for Standard Life Investments, which has $271 billion under management and holds General Motors Co. shares. “That speaks to underlying strength and confidence in the consumer which is continuing to improve.”
Deliveries of cars and light trucks probably slid to 1.14 million, the average of 10 estimates in the Bloomberg survey. The annualized industry sales rate, adjusted for seasonal trends, may climb to 15.4 million, the average of 16 estimates, from 14.8 million a year earlier. While the pace is slower than August’s 16.1 million, carmakers this year are still on track for the most U.S. deliveries since 2007.
Chrysler, which filed for an initial public offering last month, today forecast a 15.7 million industry sales pace for September, including medium- and heavy-duty vehicles, which typically account for at least 200,000 deliveries per year. The Auburn Hills, Michigan-based carmaker that extended its run of monthly sales gains to 3 1/2 years.
“Chrysler’s had this incredible streak of sustained year- over-year growth, getting through several months like this,” Alec Gutierrez, an analyst for auto-pricing website Kelley Blue Book, said in a telephone interview. “If they’re able to do so again this month, it says a heck of a lot.”
Sales of Chrysler’s Dodge Dart compact surged 51% to 7,922. Deliveries of the Ram pickup climbed 8.4% to 28,145 while the Jeep Grand Cherokee sport-utility vehicle increased 19% to 14,906.
If the government shutdown lasts three or four weeks, economists estimate it could reduce gross domestic product by as much 1.4 percentage points and drag on confidence. Deliveries of new cars and light trucks may rise to 16.1 million next year, the average estimate of 13 analysts in a survey by Bloomberg last month.
“We are optimistic that our government leaders will come together in support of a solution that funds the U.S. government and avoids significant disruptions to our still-fragile U.S. economy,” Erich Merkle, U.S. sales analyst for Dearborn, Michigan-based Ford, said in an e-mail.
GM sales may have declined 4.2%, the average of nine estimates. The Detroit-based automaker was raised to investment grade for the first time in eight years by Moody’s Investors Service on Sept. 23. The company purchased 120 million preferred shares held by the United Auto Workers retiree medical trust for about $3.2 billion. The U.S. Treasury also began selling down the rest of its 101.3 million shares.
The average estimate of seven analysts is for September declines of 2.5% by Toyota City, Japan-based Toyota Motor Corp., 0.6% by Tokyo-based Honda Motor Co. and 4.8% by Yokohama, Japan-based Nissan Motor Co.
Hyundai Motor Co. and affiliate Kia Motors Corp.’s combined deliveries probably plunged 14%, the average of seven estimates. The Seoul-based carmakers have trailed industrywide sales growth in every month since September 2012.
Volkswagen AG may post a 12% decline in combined September sales for its VW and Audi brands, the average of four estimates.