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(Bloomberg) — Auto sales accelerated more than expected in September, aided by cheap credit, good deals and relatively low gasoline prices. The annualized rate reached the fastest pace in more than 10 years.

General Motors Co., Ford Motor Co. and Nissan Motor Co. all beat analysts’ estimates, while Fiat Chrysler Automobiles NV, Toyota Motor Corp. and Honda Motor Co. met expectations for healthy sales gains last month. Labor Day deals provided a boost, while continued low interest rates and gas prices supported America’s love of pickups and sport utility vehicles. The selling rate, adjusted for seasonal trends, was 18.2 million vehicles, according to Autodata Corp.
“The U.S. is adding jobs, disposable income is rising, energy prices and interest rates remain low and business continues to invest, but the fact remains this has been a slow recovery,” Mustafa Mohatarem, GM’s chief economist, said in a statement. “The economy still has room to grow and so do auto sales.”

The booming U.S. auto industry provides a rare bright spot in the nation’s manufacturing industry and stands in contrast to stumbling economies around the world. Industry researcher LMC Automotive raised its full-year light-vehicle sales forecast by 100,000 to 17.2 million. TrueCar Inc. boosted its 2015 estimate by 200,000 to 17.4 million, a level that would match the record set in 2000.

Autos are selling well because “it’s cheap to run ’em, it’s cheap to buy ’em and there’s more people with jobs, so more people need ’em,” Mark Wakefield, managing director and head of the automotive practice for consultant AlixPartners, said in an interview. Already this year, “$98 billion has gone into people’s pockets strictly because of gas prices going down. You’re seeing the impact of that.”

Volkswagen of America, embroiled in a scandal over doctoring diesel engines to avoid pollution controls, even managed a sales gain of 0.6 percent, defying analysts predictions of a 6.7 percent decline for the brand. Combined with its Audi luxury line, Volkswagen AG sales rose 6.3 percent. VW has been forced to stop selling its vehicles equipped with the 2.0-liter TDI engine in which regulators say the company used a “defeat device” that allowed them to spew pollution at up to 40 times the legal limit.

September Surprise
GM sales rose 12 percent, exceeding estimates for a 9.3 percent gain, while Ford’s light-vehicle deliveries jumped 23 percent, topping projections for a 19 percent increase. Nissan sales climbed 18 percent, compared with a 13 percent average estimate.
Fiat Chrysler extended its sales streak to 66 months as U.S. deliveries rose 14 percent in September, powered by Jeep’s 40 percent rise. The Italian-American automaker reported sales of 193,019 vehicles last month, matching the gain predicted by the average of eight analyst estimates compiled by Bloomberg. Jeep sport utility vehicles, led by a record for Cherokee, had their second best month ever as Fiat Chrysler deliveries gained for the 66th straight month.

Car and light-truck sales totaled 1.44 million, a 16 percent jump that exceeded analysts’ estimates for a 13 percent gain. The average estimate for the selling rate was 17.7 million with the highest at 18 million.

The last time the selling rate exceeded 18 million was July 2005, when it reached 20.6 million, according to Autodata, as Ford and DaimlerChrysler followed GM with offers of employee pricing for all customers.

“We’re above the clouds. We don’t know how high it will get exactly, but we’re definitely above the clouds,” Wakefield said. This will continue “next year and the year after and then we have a dip starting in 2018, but more meaningfully in 2019.”

Big Gains

GM said sales rose to 251,310, led by its Silverado, Sierra and Colorado pickups. The Chevrolet Malibu sedan had its best September retail sales in a decade backed by a 38 percent gain. Malibu sales, including those to fleets, rose 12 percent to 17,066. GM has been paring its fleet sales this year.

Sales of Ford’s F-Series pickups rose 16 percent as the automaker finally began stocking dealers with full inventory after a nearly two-year changeover to the aluminum-bodied truck. Sport utility vehicles were Ford’s top gainers, with the redesigned Edge up 33 percent and the Explorer soaring by 38 percent. Lincoln had its best month in eight years with a 20 percent gain driven by the MKC and MKX SUVs. Sales of cars rose less, with the Focus compact down 13 percent. For the first time since February 2005, all Lincoln models increased sales.

“There’s no question today’s low gas prices are shifting the mix across the industry, but that won’t last forever,” said Bill Ford, executive chairman of the No. 2 U.S. automaker, during an appearance Thursday at the Commonwealth Club of San Francisco.
Nissan set a September sales record, driven by a 45 percent jump in sales of the Rogue small utility. Nissan’s best selling car remained the Altima sedan, which saw a 12 percent increase. The Japanese automaker’s Infiniti luxury line gained 30 percent, powered by a 76 percent rise in sales of its QX60 SUV.

Toyota sales rose 16 percent and Honda’s gained 13 percent, both matching analysts’ estimates. Toyota’s traditional SUVs had a strong month, with the 4Runner rising 33 percent and the big Sequoia climbing 35 percent. Sales of Toyota’s top seller, the Camry mid-size car, rose 21 percent. Honda set a September sales record, led by light trucks, such as the Pilot SUV, which rose 31 percent. Honda’s Acura brand rose 6.3 percent, led by the TLX sedan and RDX crossover.

GM shares rose 2.2 percent to $30.67, the highest level in two weeks. Ford gained 0.7 percent to $13.67, while Fiat Chrysler climbed 2.3 percent to $13.52 in New York. Toyota’s American depositary receipts rose 0.9 percent to $118.34.

Volkswagen’s Troubles

VW, like other automakers, benefited from Labor Day weekend, a traditional car-shopping holiday which last year fell in August. The holiday came before VW was engulfed in the scandal over its diesel engines.
Volkswagen is the subject of numerous government investigations and lawsuits since the U.S. Environmental Protection Agency said Sept. 18 that the largest European automaker admitted using a so-called defeat device that turned off emissions controls when vehicles weren’t being put through official tests. The revelation undermined VW’s diesels, which were one of its few strengths, along with a critically acclaimed line of Golf cars. Martin Winterkorn stepped down from his role as chief executive officer of the automaker.

“We would like to thank dealers and customers for the support of the Volkswagen brand,” said Mark McNabb, chief operating officer for Volkswagen of America. “Volkswagen will continue to work diligently to regain trust and confidence in our brand.”

–With assistance from Dana Hull in San Francisco.

To contact the reporters on this story: Mark Clothier in Southfield, Michigan at mclothier@bloomberg.net; Keith Naughton in Southfield, Michigan at knaughton3@bloomberg.net To contact the editors responsible for this story: Jamie Butters at jbutters@bloomberg.net John Lear