Four Reasons Why September 2017's U.S. Auto Sales Picture Isn't As Rosy As It Seems
In September, for the first time in 2017, auto sales were higher this year than last.
Compared with September 2016, auto sales in America last month were 6 percent higher, far healthier than the modest sub-1-percent uptick analysts predicted. Booming pickup truck volume, big gains from America’s best-selling SUVs and cars, continued growth from trend-bucking Subaru, and rebounds at Volkswagen resulted in an industry that reported 1.5 million total sales, nearly 90,000 more than in September 2016.
The seasonally adjusted annualized rate shot up to 18.6 million, the best SAAR since July 2005, according to Automotive News. Over the last half-decade, Americans have averaged fewer than 1.3 million September new vehicle acquisitions. Last month’s result was 18 percent better than the September average.
Sunshine and roses? An end to the U.S. auto industry’s gradual slide? A sign of a perfectly healthy market? We have four reasons you should be skeptical.
QOTD: Can We Interest You in Noah's Spark?
Ignore what some of the congenital liars in the autojourno game are saying: Most of the cars that were flooded out during recent weather events will not be “immediately crushed.” That would be utterly ridiculous. Some flood vehicles will wind up being comprehensively parted out to end users who might never need to know about the watery provenance of their secondhand parts. Does it really matter if the OEM aluminum wheels you buy off eBay were ever in a flood? What about that side marker light? You get the idea.
On the other hand, some cars will be processed, primped, and placed back in a sales channel with or without the mark of Cain on their titles. Which leads us to a question:
Car Dealers Claim Insurers Are Halting Policies Ahead of Hurricane Irma
Florida-area car dealerships are annoyed that insurance companies pulled the plug on policies earlier this week, fearing further hurricane-related payouts as Hurricane Irma approaches the coast. Insurers, including Progressive and Allstate, are reacting to losses incurred in Texas during Hurricane Harvey’s assault last month.
While this is standard practice for some companies, it isn’t a universal trend. State Farm, for example, said it would continue offering coverage until after a national hurricane advisory had been issued.
Automakers Bolt From the Gates With Post-Harvey Discounts
There was quite a debate occurring in TTAC’s private Slack channel yesterday — a conversation sparked by knowledge of a new discount from Fiat Chrysler Automobiles extended to those who lost insured vehicles in Hurricane Harvey.
The timing of the offer — CarsDirect claims the deal was valid as of August 28th, even as images and video of the waterborne and helicopter rescues of Houston-area residents filled television screens and social media — raised an eyebrow. How soon is too soon? It would seem the main concerns of impacted residents over the past couple of days included finding food and shelter, reconnecting with loved ones, and perhaps picking up the pieces in both flood- and wind-damaged communities. Not shopping for a new vehicle online.
The nature of the offer sparked further debate. Affected residents in certain Texas and Louisiana counties can show a copy of their insurance claim form to receive $500 off the purchase or lease of a new FCA vehicle, certain models (like the Jeep Wrangler, Chrysler 200, SRT models, and Alfa Romeo Giulia Quadrifoglio) not included. Buyers can combine the offer with other applicable discounts.
$500 off that new Grand Cherokee? Whoo-wee, you might say. At what dollar amount does a post-disaster offer change from feeling like an opportunistic sales grab and more like a gesture of kind-hearted humanitarian assistance? Or is this just cynical thinking — should we regard any offer as a sign of generosity? It’s certainly not a new practice for any automaker. On and on it went.
Of course, any conclusion comes down to the individual. But this morning we heard FCA isn’t alone in offering deals to Harvey victims.
Hurricane Harvey Floods Highways and Stalls Oil Production in Texas
Through Sunday morning, Harvey continued to unleash record levels of rain upon Texas, causing biblical flooding. The situation is so bad that the National Weather Service warned of “additional catastrophic, unprecedented and life threatening flooding” into the next week, and placed flash-flood emergencies for the entirety of Southeast Texas.
Harvey was the strongest storm to hit the United States since 2004 and has already trapped countless individuals, both in their homes and on the road as the rain has turned several major highways into man-made rivers. In some areas, the waterline is high enough to reach streetlights.