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Mixed sales results, but automaker stocks rise on need for cars in Houston

DETROIT — The Big Three Detroit automakers on Friday reported better-than-expected August sales and issued optimistic outlooks for demand as residents of the Houston area replace flood-damaged cars and trucks after Hurricane Harvey, sending their stocks higher. General Motors, Ford and Fiat Chrysler posted mixed August U.S. sales, with GM up 7.5 percent and Ford and Fiat Chrysler down. Japanese automaker Toyota improved sales by nearly 7 percent, while Honda fell 2.4 percent. Still, analysts focused on the potential for Detroit automakers to cut inventories and stabilize used vehicle prices as residents of Houston, the fourth largest city in the United States, are forced to replace tens of thousands, perhaps hundreds of thousands, of vehicles after the devastation from Hurricane Harvey. Mark LaNeve, Ford's U.S. sales chief, told analysts on Friday that following Hurricane Katrina in 2005 "we saw a very dramatic snapback" in demand. That said, Ford sales fell 2.1 percent in August. It sold 209,897 vehicles in the United States, compared with 214,482 a year earlier. Sales were down 1.9 percent in the Ford division and off 5.8 percent at Lincoln. Demand was down for cars, crossovers and SUVs. It was not clear how many vehicles in the Houston area will be scrapped, LaNeve said, saying he had seen estimates ranging from 200,000 to 400,000 to 1 million. Ford's Houston dealers may have lost fewer than 5,000 vehicles in inventory, he said. Ford is the No. 1 automaker in the Houston market, with 18 percent share, according to IHS Markit. The company plans to ship used vehicles to Houston dealers and has "every indication we would have to add some production" of new vehicles to meet demand, LaNeve said. Investor concerns about inventories of unsold vehicles and falling used car prices have weighed on Detroit automakers' shares most of this year. Now, automakers can anticipate a jolt of demand from a big market that is a stronghold for Detroit brand trucks and SUVs. "It's got to be a positive for the industry," LaNeve said. Investors appeared to agree. GM shares rose as much as 3.3 percent to their highest since early March. Ford increased 2.8 percent at $11.34, and Fiat Chrysler's U.S.-traded shares were up 5.2 percent $15.91, hitting their highest in more than five years. GM reported a 7.5 percent increase in U.S. auto sales in August, helped by robust sales of crossovers across its four brands.

UK Mustang buyers want big American V8s

Just before Ford ended its marketing partnership with Europe's UEFA Champions League soccer tournament last year, it showcased the 2015 Mustang during the event final in Lisbon, Portugal. Ford put 500 Mustangs up for pre-order to viewers in 20 countries, 130 of them right-hand-drive models for the UK. It didn't take 30 seconds for every car to be snapped up because almost 10,000 people tried to buy them. That's how hungry Europe is for the Mustang. That helps explain why orders for the pony car in the UK already number almost 2,000 units, which ties up production past July 2016. Ford UK released a few details on the order habits of that kingdom united, saying 80 percent have taken the coupe over the convertible, and 70 percent have gone for the 410-horsepower, 5.0-liter V8. That compares to 52 percent of US buyers taking the V8 instead of the V6 or the 2.3-liter Ecoboost. The UK V8 output number is 25 ponies down on our US model because of the switch to right-hand drive, the steering assembly location requiring a new exhaust manifold. The 2.3-liter EcoBoost is the only other engine offered there. The row-your-own set nips the slushbox crowd, 55 percent of buyers choosing the six-speed manual, and Race Red is the most popular of the ten available colors with 23-percent uptake. The graphic above breaks it all down, the press release below spells it all out. Related Video FIRST UK DELIVERIES IN SIGHT AS FORD MUSTANG ORDERS ACCELERATE TOWARDS 2,000 BRENTWOOD, Essex, UK, August 24, 2015 – Almost 2,000 Ford Mustang orders have been taken in the UK since January as the first right-hand drive cars begin to roll off the production line at Flatrock Assembly Plant in Michigan, North America. The Ford Mustang – introduced in the U.S. more than 50 years ago – has excited fans across the globe, but has never been available to order with right-hand drive, until now. The first UK customer deliveries are expected from November, with extra supply secured to meet the greater than expected demand. So far, 80 per cent of UK customers have opted for the fastback body style over the convertible and 70 per cent have specified the 416PS 5.0-litre V8 engine over the more fuel-efficient 317PS 2.3-litre EcoBoost engine. Mustang's six-speed manual transmission is the slightly more popular choice (55 per cent) over the six-speed automatic, which comes with sporty SelectShift paddle control.

Performance cars driving sales gains

We're living in a fantastic time for performance cars. For drivers, there are a bevy of exciting models either already here or on the way that cater to different demographics within the niche, like the 2016 Mazda MX-5 Miata, Ford Shelby Mustang GT350 and Dodge's Hellcat-powered products. While trucks and crossovers still offer a booming market at the moment, sporty vehicles are another way for automakers to make some cash, too. According to Ford Performance director Dave Pericak speaking to Automotive News, "Performance vehicle sales around the world continue to grow – with sales up 70 percent in the United States and 14 percent in Europe since 2009." Automakers love this popularity because the sporty models create a perfect storm to make big money on each sale. One reason for the strong margins is that performance vehicles are generally based on existing models or platforms. That keeps development costs lower and allows for a focus on tech like turbocharging or light-weighting to subsidize investments for future products. When it comes time to arrive in the showroom, automakers can load them with equipment, according to Automotive News. With transaction prices already growing thanks to longer loans, buyers have been willing to pay more as of late, as well. The customers in the segment also tend to be younger and more affluent. For example, 30 percent of customers for Ford's ST models have a household income over $100,000 and Millennials buy them twice as much as other products from the brand, according to Automotive News. Despite popular myths, young people still like to drive, which could mean possible return customers. The performance trend certainly isn't on the wane yet. In fact, vehicles like the 2016 Chevrolet Camaro, Ford Focus RS and Fiat 124 Spider show more fun is on the way. Related Video: Featured Gallery 2014 Ford Fiesta ST View 47 Photos News Source: Automotive News - sub. req.Image Credit: Scott Olson / Getty Images Ford Car Buying Car Dealers Performance sales performance car