US sales seen to surge in October despite government shutdown

Article by Anita Panait, on October 30, 2013

Although the U.S. government shutdown negatively affected sales in the first half of October, forecasters still expect vehicle sales in the country to surge at least 12% in the month. Some dealers near Washington told Automotive News last week that showroom traffic had yet to rebound since the federal government resumed full operations in Oct. 17.

Other dealers, meanwhile, said they saw few effects from the 16-day government shutdown, as customer has already started flocking to their showrooms. Jim Bone, dealer principal at Nissan Santa Rosa, told Automotive News that October is "trending to be one of the better months of the year." Bone, however, noted that his adjacent Kia store has been "off significantly" in October.

Forecasters see sales in October to be around 7% higher than in September, despite warnings from auto executives that the government shutdown could cause sales to drop this month.  On Oct. 15, Hyundai Motor America chief executive John Krafcik said demand could be 5 to 10% lower than in September. However, analysts from LMC Automotive, Kelley Blue Book and Barclays Capital see the auto industry's seasonally adjusted annualized selling rate to surge to an estimated 15.4 million in October 2013, from 15.3 million in September 2013 and 14.4 million in October 2012.

Edmunds.com is expecting a 13-percent increase and a SAAR of 15.5 million. Jessica Caldwell, Edmunds' senior analyst, said in a statement, that it appears that the government shutdown "ended just in the nick of time."

She said that the week-by-week data suggest "that consumers started to get jittery by the middle of the month." She said that with the government now online, most lost sales should be made up in the latter half of October, adding that the auto industry's momentum will be similar to the pace before the government shutdown.

Topics: united states, sales

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