The shutdown of the United States government will affect vehicle sales in the country in the first half of October, according to J.D. Power and LMC Automotive. The two consultancies, however, expect new-vehicle purchases for October to surge 8 percent year-on-year. They expect October sales to reach 15.4 million vehicles on a seasonally adjusted annualized basis.
According to John Humphrey, senior vice president of J.D. Power's global automotive practice, sales were affected during the federal government shutdown in the first 16 days of the month, and they have since rebounded. He disclosed that sales in the third week of October strengthened relative to the first two weeks, which means that the consumers were delaying their vehicle purchase until the shutdown was resolved.
On the other hand, Jeff Schuster, senior vice president of forecasting at LMC Automotive, said that their vehicle sales forecast for full year 2013 remains unchanged at 15.6 million new vehicles, up from 14.5 million in 2012. He said while US sales of more than 16 million vehicles is "well within reach" in 2014, consumer confidence may suffer if the US Congress again goes into stalemate when it considers raising the national debt ceiling.
Forecasters Edmunds.com and Kelley Blue Book also expect auto sales gains for October. Edmunds.com expects a 13-percent surge in sales and an annualized rate of 15.5 million vehicles while KBB forecasts a 12-percent rise and an annualized sales rate of 15.4 million vehicles.
KBB expects major carmakers to post sales hikes in October, including General Motors (8 percent); Ford (14 percent); Toyota (16 percent); Chrysler (12.5 percent); and Honda (12 percent). Edmunds expects growth for the top five carmakers in US sales -- GM (10 percent); Ford (15.5 percent); Toyota (15.2 percent); Chrysler (11 percent); and Honda (12.6 percent).