Analysts predicted that hurricanes Harvey and Irma would deliver automakers their first monthly sales gain in 2017 and they were right. Major automakers reported increased U.S. new vehicle sales during the month of September, in particular southeast Texas, as many had to replace flood-damaged cars.
Others advised that high inventory levels and record consumer discounts remained a high concern.
General Motors Co, the number one US automaker, reported sales climbed 12 percent compared to the previous year. Specifically reporting a 43 percent increase in sales of crossovers and a 10 percent rise in pickup trucks offset the 11 percent drop of passenger cars.
GM inventory reduced to 76 days supply from August’s 88 days supply, positive progress since analysts believe they are the primary reason of the industry’s oversupply of unsold new vehicles. GM getting closer to their goal of 70 days by the end on 2017.
GM chief economist Mustafa Mohatarem stated the, “overall strength of the U.S. economy is the main force driving the market,”. He believes recovery in areas affected by the hurricanes are “spurring new and used vehicle sales.”
New car sales in the Houston area rose 109 percent just three weeks after Hurricane Harvey. It has been estimated that nearly 500,000 cars were damaged or destroyed by the hurricane.
Jessica Caldwell, an executive director of industry analysis, stated that although sales are up automakers have been struggling to reduce inventories around the country.
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Ford Motor Co’s sales increased 8.7 percent in September.
Toyota Motor Corp’s September sales increased nearly 15 percent, with solid gains for SUVs and trucks.
Fiat Chrysler Automobiles NV reported a 10 percent decline in sales.
Nissan Motor Co Ltd’s Septempber sales increased about 9.5 percent.
During early trading, Ford shares grew 2.1 percent to $12.34 and GM was up almost 3 percent to $43.37.