U.S. October Auto Sales Strong But A Bit Less Momentum - Forbes

The car companies are expected to announce higher U.S. auto sales for the month of October, on Monday, Nov. 3.

The short version is, sales growth is expected to be strong, but the rate of growth is slowing, in terms of the year-over-year percent increase vs. 2013, compared with the increase in 2013 over 2012.

That's natural, since percent increases obviously get tougher as the overall level of sales continues to increase. But an analyst expressed concern at the possibility of higher incentives used to stimulate sales.

Kelly Blue Book said it expects in increase of about 5.4 percent year-over-year, to 1.27 million units. That works out to a Seasonally Adjusted Annual Rate of 16.3 million, according to Kelly Blue Book, Irvine, Calif.

Ram 1500 pickup, Warren Truck Assembly Plant; Fiat Chrysler photo

Alec Gutierrez, senior analyst, said he's starting to get concerned about the level of incentives or discounts necessary to maintain sales at the current level. He said in a written statement incentive spending "isn't a red flag quite yet, but it does underline that the natural industry growth we've had in recent years is slowing."

Still, the estimated SAAR for October is 1 million units higher than October 2013, when it was 15.3 million. The SAAR is an estimate for the full year, based on the sales pace for a single month, and on sales history.

Fiat Chrysler Automobiles is expected to have the greatest year-over-year percent increase in sales for the month, of the eight biggest manufacturers in the U.S. market.

KBB said it expects Fiat Chrysler sales, led by the Jeep brand, of about 167,000 units, up about 19 percent.

TrueCar Inc., Santa Monica, Calif., announced a very similar forecast for October auto sales, at about 1.28 million units, up about 5.9 percent. That's a SAAR of about 16.3 million vehicles, TrueCar said.

John Krafcik, president of TrueCar, said that would be the strongest U.S. industry car sales for the month of October sine 2004. He said the industry is "on track" to finish 2014 at around 16.4 million units.

U.S. auto sales last year were 15.6 million, according to AutoData Corp., Woodcliff Lake, N.J. Sales for 2014 of 16.5 million would be an improvement of close to 6 percent. Sales for 2013 were an increase of 7.6 percent vs. 2012.

Source : http://www.forbes.com/sites/jimhenry/2014/10/30/u-s-october-auto-sales-strong-but-a-bit-less-momentum/