September 2013 car sales: Government shutdown, meet sales shutdown
Nearly all major automakers saw a fall in sales this September. Padgett examines these sales reports to see if the industry will shake off this early fall or head down a slower path to recovery.
Car sales hit the skids in September, as the major automakers saw double-digit gains from summer turn to single digits--and head in the wrong direction, in some cases.Skip to next paragraph
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Numbers are trending downward for many mass-market nameplates as the Federal government shutdown enters its second day, the culmination of a political battle over funding for the Affordable Care Act (ACA).
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Among the Big Six automakers, Ford and Chrysler eked out single-digit gains--while General Motors watched sales drop by 11 percent, and Nissan fell 5.5 percent. Toyota was up 4 percent--but without accounting for fewer selling days last month, its sales actually fell 4.3 percent.
For most of the summer, automakers had posted strong sales gains, hinged on the continued slow recovery of the economy, the availability of easier car financing, and the proliferation of brand-new models, including new pickups from Chevy and GMC and new family sedans still in their first year on sale.
Politics of the day aside, some of the real drivers behind this month's drop are anomalies of the calendar. September's short on days versus August, and includes the Labor Day holiday weekend.
More troubling, it could be the first round of the endgame between low-interest loans and higher car prices.
Low interest rates have kept sales percolating for most of the summer, though rates have climbed some from near-historic lows. The national average rate for a 48-month new car loan is now 2.82 percent according to Bankrate.com, up slightly over the year's trend.
At the same time, new-car prices are still rising. According to pricing site Truecar, the average car price in September was $31,854, up 5.2 percent or $1,572 over the same period last year, and up more than $600 from the month before.
The gradual change in fundamentals hasn't substantially altered sales outlooks for the year yet--although with sales having reached a post-recession peak last month, this month's numbers are sure to set off a new round of introspection, and possibly, of incentives. J.D. Power and LMC Automotive still are forecasting a 2-percent gain for sales in September--with the seasonally adjusted annualized rate (SAAR) for September 2013 at 15.2 million vehicles, down from August's 16.1 million. LMC predicts sales to settle in at 15.6 million units for the year.
Will the industry shake off this early fall, or head down a slower path to recovery? The September numbers shed a little light, automaker by automaker: