Auto sales are on pace to increase at least 12 percent this month from a year ago, according to four analyst forecasts released today, as the industry regains momentum lost during a weak September and a 16-day government shutdown.
Analysts from LMC Automotive, Kelley Blue Book and Barclays Capital each said the industry's seasonally adjusted annualized selling rate would climb to an estimated 15.4 million, from 14.2 million in October 2012. Edmunds.com is forecasting a 13 percent increase and a SAAR of 15.5 million.
"It looks like the government shutdown ended just in the nick of time," Jessica Caldwell, Edmunds' senior analyst, said in a statement. "The week-by-week data suggests that consumers started to get jittery by the middle of the month. But with the government back to work, most lost sales should be made up in the latter half of the month, and the industry's momentum will continue the pace it enjoyed before the disruption in Washington."
Registration data from J.D. Power and Associates, which LMC uses to prepare its forecasts, show that retail sales strengthened after the government resumed operations Oct. 17. Sales were most affected in the Atlantic Coast region, falling 6.5 percent in the first two weeks of the month before rising 2.5 percent after the shutdown ended. LMC expects retail sales nationwide to be up 12 percent for all of October.
"The government shutdown clearly had an impact on retail sales through government employees directly affected by the shutdown, vehicle shoppers involved in businesses impacted by the shutdown and its impact on consumer confidence," John Humphrey, senior vice president of the global automotive practice at J.D. Power, said in a statement.
"However, sales in the third week of the month strengthened relative to the first two weeks, which is evidence of vehicle buyers delaying their purchase until the shutdown was resolved."
LMC said it is reducing its full-year retail-sales forecast by 100,000 units, to 12.8 million. Its forecast for total sales is unchanged at 15.6 million, matching the projections by KBB and Barclays analyst Brian Johnson.
Jeff Schuster, LMC's senior vice president of forecasting, said he still expects sales to surpass 16 million units in 2014 but warned that demand could take another hit from Congress early in the year.
"There is a higher risk that consumer confidence could be distracted again in the first quarter if, as expected, the debt-ceiling gridlock returns," he said.
Edmunds and KBB say Toyota Motor Sales USA and Ford Motor Co. will report the largest gains among the eight largest automakers. They each expect General Motors, Hyundai-Kia Automotive and Volkswagen Group of America to lose market share with below-average increases.
Chrysler Group should report its 43rd consecutive year-over-year monthly increase, they said, though Edmunds expects the company's share to fall slightly.
October's anticipated increase comes after U.S. auto sales fell 4 percent in September, breaking a streak of 27 consecutive year-over-year gains for the industry. Sales in October 2012, when the SAAR was 14.2 million, were hurt by Hurricane Sandy striking New York and other parts of the Northeast.
