August U.S. Auto Sales and the Way Ahead

The monthly automobile sales in the U.S. market in August outperformed expectations. Analysts were estimating that the auto market will decline in August, with most major automobile manufacturers showing negative growth. However, the sales numbers surprised everyone in August as the industry hit a seasonally-adjusted annual rate of 17.8 million units.

In comparison, the SAAR for August was expected to be 17.2 million to 17.4 million, in line with last year as well as with the full year outlook given by industry experts. Hence, the U.S. auto market outperformed expectations, but will the good times continue?

What next

The only real cause of worry for the U.S. industry is the turmoil in the equity markets across the globe, which have declined precipitously in the last few weeks.

Alec Gutierrez, senior analyst for Kelley Blue Book says, "We remain confident that sales in August will remain robust; however, should the U.S. financial markets continue to falter, we could see demand for new cars soften in the short to medium term."

Otherwise, the environment in the country is favourable for the automobile industry with the 17 million-plus SAAR guidance intact. Indicators such as the US unemployment rate and currency appreciation as well as China slowdown are in favour of those who sell their vehicles in the U.S. So, unless the US stock market continues to dive deep enough, the auto industry of the U.S. is going to close the year on a high.

A closer look at the players

Fiat Chrysler Automobiles (FCAU), which has not seen a fall in monthly sales for 65 months since March 2010, is seeing an incredible year of growth with the highest year-to-date sales increase of all major manufacturers. General Motors (GM), however, is expected to lose a bit of market share to Ford going forward.

In fact, Ford displayed impressive sales growth in August as it sold more of its flagship product. Sales of the F-150 have been sluggish so far this year with numbers declining 1.3% through July. But, August was a turnaround month as F-150 sales increased impressively last month.

With its F-150 growing both in sales as well as available inventory, Ford could continue gaining more traction in this segment going forward. Hence, there is a good chance for Ford to come closer to General Motors and surpass Toyota Motor in terms of market share in this segment.


U.S. auto sales for August 2015 were beyond expectations. The SAAR, which is a much better indicator of the health of U.S. automobile industry, is growing at an impressive pace. So, sales of vehicles in the U.S. will continue improving going forward. In my opinion, Ford will be able to continue its recent traction going forward as it does not suffer from production woes of the F-150 anymore. Hence, investors should keep a close watch on Ford's sales going forward as it could be the pick of the lot in the U.S. auto industry.

Published on Sep 9, 2015
By Vinay Singh

Copyrighted 2016. Content published with author's permission.

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