October Sales Briefly Slowed Due To Shutdown

TTAC Staff
by TTAC Staff
october sales briefly slowed due to shutdown

What has the shutdown (and near-meltdown) of the United States government wrought in its wake? Delayed unemployment reports, a belated spotlight upon the broken ACA website, and of course, apprehension among customers looking for their next car to lease or buy. But now that the cans have been kicked hard down the road… again, the showrooms are back in business as if our elected leaders hadn’t gone mad in the first place.

According to Automotive News, sales forecasts for the month of October are expected to rise 12 percent, with an estimated 15.4 million vehicles to be sold by the end of the year. The shutdown brought an end to a 27-month consecutive streak of gains as the auto industry climbed out of the Great Recession, but analysts such as Edmunds’ senior analyst Jessica Caldwell might view the bickering as a mere speed bump:

It looks like the government shutdown ended just in the nick of time. The week-by-week data suggest that consumers started to get jittery by the middle of the month. But with the government back to work, most lost sales should be made up in the latter half of the month, and the industry’s momentum will continue the pace it enjoyed before the disruption in Washington.

While things seem rosy for all those “December to Remember” big red bow tie extravaganzas to come, that new Lexus will soon come to a stop at the same cans that were just punted early in October. In a statement made by industry forecaster LMC Automotive Senior Vice President of Forecasting Jeff Schuster, though he expects annual sales to go over 16 million units in 2014, “there is a higher risk that consumer confidence could be distracted again in the first quarter if, as expected, the debt-ceiling gridlock returns.”

Join the conversation
  • Lie2me Lie2me on Oct 28, 2013

    The government was not about to disrupt the Holiday shopping season, they have their priorities

  • Jimmyy Jimmyy on Oct 28, 2013

    Lets continue to cheer profitable fleet sales which is the secret to the Detroit automaker survival and profitability. As usual, Detroit automakers will try to disguise their sales success as "retail" while they obscure and undercount fleet units. In economic term, the fleet sales success represents an oligopoly pricing structure since most fleet buyers are customers of the Detroit automakers only. Thanks to government restructuring and ownership, GM and Chrysler have had fleet prices where the UAW contracts needs them, then Ford just follows the pricing structure set by the government. But, these automakers will tell the world that their profitability is driven by great products to retail customers. In truth, if the fleet sales went to the foreign nameplates, Detroit would fold since most Detroit brands are inferior in reliability according to Consumer Reports while sporting premium "UAW friendly" price tags. I would bet Detroit loves Obama, since his administration was the architect behind the "fleet sales oligopoly", but fears a "free market" Republican president. Obamacare may be the end of the Democrats, so I hope Detroit comes up with plan B which should be titled "How to survive when Democratic propping of the auto industry ends".

  • Jimmyy Jimmyy on Oct 28, 2013

    Get ready for the sales report, or should I call it the fleet sales report. And, once again, Detroit will attempt to obscure and undercount massive fleet sales, which is a main driver of their profitability. And, they will exaggerate "retail" buyers falling over themselves to get their great products. The only reason Detroit is enjoying fleet sales success is because of the oligopoly pricing structure set in place by the Obama administration's restructuring and government/UAW ownership of the auto industry. You see, most fleet buyers are restricted to "buy American", so they have a limited number of automakers they can buy from, and that is where the oligopoly comes from. Detroit's only hope is they can keep their fleet sales oligopoly in place, which is unlikely once the Democrats are out of office, which may occur because of Obama care.

    • See 4 previous
    • Jeff Weimer Jeff Weimer on Oct 28, 2013

      @charly That's a good question, but a bit beside the point - he was ranting about the US manufacturers, and Honda isn't what he was talking about even if they do make cars here like they have for the last 30 years. Also, Honda doesn't "officially" do fleet sales, so there's probably less of a discount per unit.

  • Lou_BC Lou_BC on Oct 28, 2013

    I had read that car companies tend to look at fleet sales from a perspective of favourable and unfavourable. Pickups tend to be favourable since they have higher profit margins to begin with. Trucks tend to get run hard in a fleet setting so there is more money to be made on the parts and service end of the equation. I suspect that turnover is higher as well.