Auto sales slip but bigger vehicles flourish – USA TODAY
U.S. auto sales slid 4.4% October, compared to a year earlier, but the figures show the industry still has a shot at matching or exceeding 2015’s record year.
October’s annualized selling rate of 18.29 million units topped last October’s pace of 18.18 million vehicles, according to Autodata estimates. At that rate, the industry could yet exceed 2015’s full-year record of 17.47 million vehicles sold, although a few weak summer months may prevent another high mark.
While crossover SUVs and pickups sold well, car sales floundering amid low gasoline prices, and profit-draining incentives are creeping upward.
But automakers won’t complain. Sales of roomier crossovers, sport-utility vehicles and pickups are collectively far more profitable, bolstering the bottom line for the industry.
“I can’t emphasize enough that while we are seeing sales off last year’s peak, they are just barely off,” Autotrader.com analyst Michelle Krebs said, though she cautioned that “softening” when in it comes to sales of new cars and trucks to individual customers, instead of fleet sales.
Discounts were up about 12% over the last four months, marking “the highest level we’ve seen post the Great Recession,” Barclays analyst Brian Johnson said in a research note.
General Motors said its U.S. auto sales fell 1.7% in October, compared to a year earlier, but retail sales rose 3% as the company continues to reduce its reliance on less-profitable fleet customers.
The solid performance precipitated a stock upgrade from Morgan Stanley analyst Adam Jonas, who said in a research note: “Something has to give as we believe the stock market cannot ignore GM’s performance for much longer.”
Maybe so. But that day was not Tuesday. GM shares declined 12 cents Tuesday to close at $31.48.
Fiat Chrysler Automobiles posted a 10.3% sales decline for the month, as all of its brands except the truck-heavy Ram lineup recorded sales decreases.
Fiat Chrysler’s sales included a 6.6% decline for the stalwart Jeep brand, which is usually a bright spot because of its strong lineup of sport-utility vehicles. The company’s car-heavy Chrysler brand plummeted 44.7%, Dodge declined 16.4%, Fiat fell 24.3% and Ram rose 11.5%.
Cross-town rival Ford Motor did not report its October sales on Tuesday after a fire at an electrical substation cut off power to facilities at its headquarters in Dearborn on Monday, preventing dealers from reporting final-day sales figures. Autodata based its industry projections on an estimate of Ford sales being down 2.3% for the month.
Ford said it did not lose any data because backup power worked as expected. The company will release sales later this week.
Japanese automakers Toyota, Nissan and Honda slid 8.7%, 2.2% and 4.2%, respectively.
Meanwhile, German automaker Volkswagen Group’s namesake brand continued its prolonged sales slump as the company tries to overcome a diesel emissions scandal and an outdated product lineup that have kept shoppers away from the showroom. VW brand sales reversed 18.5% to 24,779 units.
It was a particularly rough month for VW because October, 2015, was the first full month after the scandal erupted, leaving dealers without diesel cars to sell.
“At this stage, it does look like Volkswagen continues to struggle,” Kelley Blue Book analyst Alec Gutierrez said. “I don’t know that we’ve seen a floor yet.”
South Korean automaker Hyundai recorded a sales increase of 4.2%, while Kia posted a 2.1% decline. Japanese automaker Subaru’s winning streak continued with a sales increase of 4.1%.
Autodata estimated that electric-vehicle maker Tesla Motors’ sales rose 86.4% to 4,100 units in October.
Follow USA TODAY reporter Nathan Bomey on Twitter @NathanBomey.