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US auto sales accelerated in September, receiving a boost from the Labour Day holiday weekend falling entirely in the month and other favourable conditions that have been in play all year. This has laid the foundation for the car industry to achieve its best sales year since the turn of the century when auto sales came in at almost 17.4 million.
Car and light-truck unit sales totalled 1.44 million in September, up almost 16 percent over September 2014. That the Labour Day weekend and its associated sales offerings fell entirely in September this year provided a nice assist to industry sales, but cheap credit and low prices at the pump are also fuelling strong auto sales in the United States.
The seasonally adjusted annual rate (SAAR) of sales for light vehicles in September in the US topped 18.2 million according to industry researcher Autodata. It is rare for the SAAR to top 18 million in any month, and this September came on the back of four prior consecutive months where adjusted sales exceeded the 17 million level.
Three quarters of the way through the year 2015 continues to be on track to be another bumper year for auto sales in the US and could set a new record level, exceeding the almost 17.4 mark reached all the way back in 2000.
Our exposures fared pretty well in September in terms of their US sales, as even the Volkswagen badge managed to eke out a slight year on year gain despite the emissions scandal. Importantly for the company, its Audi badge models continued to fly out the door.
Toyota (NYSE: TM, initial buy $94.45) reported super September 2015 sales of 194,399 units, a surge of 16.2 percent from September 2014 on a volume basis. With one more selling day in September 2015 than in September 2014, sales increased 11.6 percent on a daily selling rate (DSR) basis.
The Lexus badge continues to impress in the US market and in September sales came in at 25,294 units, up 15.8 percent from September 2014 on a volume basis and 11.1 percent on a DSR basis. Of Lexus’ performance, Lexus group vice president and general manager Jeff Bracken said, “Lexus’ robust sales performance continues to be driven by our luxury utility vehicles. The outgoing RX maintained its segment dominance while the GX enjoyed another solid month,” and added, “With this momentum and the arrival of new models like the 2016 RX, RC200t, IS200t and GS200t, Lexus is well positioned to finish the fourth quarter strong.”
The BMW (DE: BMW, initial buy at €57.60) Group (BMW & Mini combined) reported September sales of 31,022 vehicles, an absolute increase of 4.1 percent from the 29,806 vehicles sold in the same month a year ago. Sales of BMW brand vehicles increased by around the same percentage amount (4.0%) in September to 25,587.
Volkswagen (DE; VOW, initial buy at €177.20) shifted 26,141 units in the US market, a 0.6 percentage point increase over the previous September. Although Volkswagen missed out on the sales surge that the broader market experienced, things could have been far worse given the emissions scandal. We note too that the US market has been a tough one for the Volkswagen marque with a range that largely lacks the pick-up trucks and SUVs that resonate well with American car buyers.
The company can be pleased though that the scandal has not had a flow on impact to the Audi badge in the US market at least, which racked up a 57th consecutive month sales record. It was the best September on record for Audi USA, with sales increasing an impressive 16.2 percent to 17,340 vehicles.
Finally, Tata Motors (NYSE: TTM, initial buy $34.56) owned Jaguar Land Rover (JLR) had a pearler of a month in the US market, with 6,850 units sold. That represented a whopping 61% year on year increase. JLR was lapping a relatively weak figure from a year ago, but nevertheless the 6,850 units represented a strong showing.
It is the Land Rover and Range Rover models that are continuing to lead the way, with unit sales up 89 percent to 5,855, while Jaguar sales decreased 13% to 995 units. A bright spot for Jaguar was that the F-TYPE shifted 354 units for its best September ever in the US market. That most investors are largely ignoring JLR’s strong sales showing outside of China currently is a scenario we do not expect to persist for the long term.
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