General Motors (GM - Get Report) , Ford (F - Get Report) and Fiat Chrysler (FCAU - Get Report) posted double-digit gains sales gains in October, a sign of the auto industry's strength in the U.S. and the continuing sturdiness of the national economy.
The seasonally adjusted annual rate (SAAR) for the month appeared headed for the low 18-million level, the strongest month since 2001 when extraordinary incentives were offered to stimulate the national economy in the wake of the attacks of 9/11.
By early Tuesday afternoon, about 80% of the results for car sales had been reported.
Average transaction prices on new vehicles rose slightly in October to more than $34,000 from the month previous, showing that consumers were willing to spend more on optional equipment and fancier models, according to Kelley Blue Book. An exception was Volkswagen (VLKAY) .
"Volkswagen had the largest month-over-month drop as the diesel emissions issue continues to impact the automaker," said Ashkay Anand, Kelley Blue Book analyst. "Six out of the eight vehicles within its lineup were down from last month, while only the Golf is up from this time last year, potentially reflecting Volkswagen's need to offer their vehicles at slightly lower prices since consumer perceptions of the brand may be impacted."
Jeff Schuster of LMC Automotive told Bloomberg News: "The consumer is driving this. 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."
Assuming continued strong vehicle sales this month and next, the U.S. auto industry is on track to surpass 18 million in sales for the first time, breaking the record set in 1999.
GM, whose sales rose about 16% for the month to 262,993, said it was the company's best October since 2004. Shares of GM, the No. 1 U.S. automaker, rose slightly Tuesday afternoon. Ford, the second-biggest U.S. automaker, posted sales of 213,938 for the month, up 13%. Ford's average selling price of $34,600 was a record, said Mark LaNeve, Ford's head of sales and marketing. The stock rose 0.5%
Fiat Chrysler sold 195,545 vehicles, up 14.7% for the month, its 67th straight month of year-over-year gains dating to the global financial crisis. Toyota's (TM - Get Report) total of 204,045 marked a 13% increase. Nissan's (NSANY) 116,047 vehicles sold represented a 12.5% gain, powered by strong sales of the automaker's Rogue midsize crossover.
Rebecca Lindland, a senior analyst for Kelley, sounded a note of caution about relaxation of credit terms for some customers.
"Longer loan terms allow for lower car payments, but also lower equity in the vehicle," she said, which means that the period of ownership and purchase of another vehicle is delayed.