Lower gas prices boost US SUV sales in October
DETROIT (AP) -- Falling gas prices improved buyers' moods and boosted sales of SUVs and trucks in October.
GM, Toyota, Chrysler, Nissan, Volkswagen and Honda all reported sales gains last month. Of major automakers, only Ford and Hyundai saw declines.
Industry sales rose 6 percent over last October, according to Autodata Corp.
The national average price of gasoline fell 33 cents to end October at $3 a gallon, according to AAA. Gasoline is now the cheapest it has been in four years, and the decline accelerated a trend toward SUVs and trucks that has been going on all year.
"Gas prices coming down added a little bit of fuel to the fire, but that fire was already roaring," said Alec Gutierrez, a senior analyst with Kelley Blue Book.
Small SUVs have been the fastest growing segment in the U.S. this year, and now make up one out of every four vehicles sold, says Jesse Toprak, the chief sales analyst for the car buying site Cars.com.
But gas prices fueled sales of bigger SUVs. Kelley Blue Book saw renewed interested in the mammoth Hummer H1 last month, for example. Sales of the recently redesigned Lincoln Navigator eight-passenger SUV jumped 38 percent, while Chevrolet Tahoe sales rose 6 percent.
Gas prices also convinced small business owners to go ahead and buy pickup trucks, Toprak said. GMC Sierra sales jumped 12.5 percent in October. Ram pickup sales were up 33 percent.
Fuel economy is no longer top of mind for most buyers, according to annual survey taken by J.D. Power and Associates in June. Last year it ranked No. 3 on the list of reasons why people buy cars. This year it dropped to No. 6 behind reliability, styling, brand preference, ride and handling, reputation and price.
As a result, hybrid sales are suffering. Sales of Ford's C-Max hybrid dropped 22.5 percent in October, while Toyota Prius sales were down 13.5 percent.
But sales of some small cars rose. Lower gas prices can help first-time buyers and others feel comfortable enough to buy a new car. Sales of the newly redesigned Honda Fit subcompact were up 83 percent in October, for example, while sales of the Nissan Sentra small car rose 56 percent.
"Lower gas prices are actually a tide that floats all ships," said Jessica Caldwell, a senior analyst with the car buying site Edmunds.com.
General Motors' overall U.S. sales rose just 0.2 percent to 226,819. Chevy Cruze compact car sales were up 51 percent, largely due to increases in fleet sales to governments and rental car companies.
Ford's sales fell 2 percent to 187,897. Its car sales declined 11.5 percent, but SUV sales were up 10 percent. F-Series truck sales were flat. For several months now, Ford has tried to limit pickup sales and keep some trucks in stock as it prepares for the launch of a new F-150 later this year.
Chrysler said its U.S. sales rose 22 percent to 170,480 for its best October since 2001. The red-hot Jeep brand led the way with a 52 percent increase over a year ago.
Toyota said it set an SUV sales record in October thanks to a 22-percent gain for its RAV4 small SUV, and a 30-percent jump in sales of the Highlander mid-size SUV. Toyota's sales were up 7 percent overall to 180,580.
Nissan, Honda and Subaru all reported their best October sales ever. Honda sales rose 6 percent, backed by a 30-percent gain in sales of the CR-V, the nation's top-selling SUV. Subaru benefited from strong sales of the Outback small SUV, while Nissan got a boost from demand for the Frontier small pickup.
Hyundai's sales dropped 6.5 percent to 50,081. While sales of its Tucson SUV rose 44 percent, that wasn't enough to offset sagging sales of its Sonata and Elantra sedans.
Volkswagen, which has struggled for months with older products, saw sales jump 8 percent in October after the arrival of the new Golf small car.
Sales should remain strong through November and December and close out the year at 16.5 million, up 6 percent from 2013, Toprak says. He says buyers should look for big discounts in small cars as well as full-size trucks and SUVs for the remainder of the year.
"At the moment, the picture is rosy. Sales are doing well, incentive levels appear to be higher but still in check," Toprak said. "Things are in a pretty healthy balance in the industry."