U.S. Auto Sales Jump In October

U.S. automakers have reported massive increases in car sales in October, driven by the strong consumer demand for larger and more expensive vehicles amid low oil prices and an improving economy.

Overall, car sales are on track to reach their highest October sales volume since 2001. Auto industry sales in the U.S. in October rose 13.6 percent from a year ago, while analysts had forecasted the month’s sales to be 8 to 12 percent higher than last year. A Reuters poll of 45 economists indicated expectations of a seasonally adjusted annualized sales rate of 17.7 million vehicles for last month.

Fiat Chrysler said its sales jumped 14.7 percent, while GM reported 16 percent growth, with both companies performing better than expected. Fiat Chrysler recorded its best sales for the month since 2001, selling 195,545 vehicles, compared to 170,480 in October 2014. Jeep brand sales spiked 33 percent, while eight of the automaker’s vehicles posted their best October ever: Dodge Charger, Dodge Challenger, Dodge Journey, Jeep Cherokee, Jeep Compass, Jeep Patriot, Jeep Wrangler and Ram ProMaster.

All of the major automakers, expect Volkswagen AG, due to its diesel emissions scandal, were projected to report October increases. Toyota, with the smallest of those projected gains at 8.5 percent, said that its sales rose 13 percent, with SUV sales increasing 20 percent at the namesake brand and 34 percent at its luxury Lexus division.

Combined sales of Volkswagen and Audi rose 5.8 percent, with VW brand sales increasing 0.2 percent and the luxury Audi brand reporting a massive increase of 17 percent. The German automaker used steep discounts, rebates and low-cost leases to keep its sales up as it battles allegations of cheating on U.S. emissions tests.

The increased sales are due in part to consumers continuing to purchase larger and pricier vehicles amid low interest rates, cheap fuel and a stronger economy, as well as being helped by the extra weekend in October of this year in comparison to 2014.

“The consumer is driving this,” said Jeff Shuster, an analyst for LMC Automotive. “You have a consumer who feels good about the economy, who wants a new vehicle and who has the means to get it with relatively cheap credit. Everything is aligning.”

According to Kelley Blue Book, overall U.S. auto sales are expected to increase 12 percent year-over-year to 1.43 million vehicles. Compact utilities are expected to hit their third month as the top segment with 40 percent growth. The automotive research company explains that the “exploding popularity” of small utility vehicles is resulting in a loss of market share for small and midsize cars, with an estimate that market share for both smaller-car segments will drop more than a full percentage point.