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Even though 2019 has been marked by six monthly U.S. sales declines, the toll on the industry had been relatively small, with demand slipping less than a percentage point through August.
That changed in a big way in September, as the biggest Asian automakers recorded double-digit sales declines and estimates for the Detroit 3 showed double-digit drops as well. Still, the seasonally adjusted annual sales rate came in at a robust 17.16 million.
Blame the calendar for some of the damage. September had two fewer selling days than the year-earlier month. More critically, sales around the critical Labor Day weekend this year were counted as part of August’s tally.
That quirk helped lift August’s industry total 10 percent ahead of their year-ago pace, the industry’s biggest monthly increase in almost three years.
But that was given back in September, as sales fell 12 percent, according to Automotive News Data Center estimates that take into account third-quarter tallies reported Wednesday by General Motors, Ford Motor Co., and Fiat Chrysler Automobiles. The SAAR, which factors out the calendar swings, topped 17 million for the fifth time this year.
Ford Motor Co. posted a 12 percent drop for the month, according to Data Center estimates. Ford F-series sales dropped 13 percent during the month while Explorer sales plunged 47 percent, according to the estimates.
GM and Fiat Chrysler fell an estimated 10 percent. Ram was the only FCA brand to post a gain during the month, rising 2.7 percent to 57,963 deliveries.
Among other highlights: Nissan Motor Co. volume plunged 18 percent and Toyota Motor Corp. was down nearly as much for its biggest slide in eight years. Honda Motor Co., too, recorded its steepest drop in nearly as long.
Hyundai ended a 13-month winning streak with an 8.8 percent setback. And for the first time since 2011, Subaru wound up in the losing column.
Company by company in September
At Toyota, volume dropped 17 percent last month, with sales off 16 percent at the Toyota division and 23 percent at Lexus. Toyota Motor said car demand dropped 16 percent, including double-digit drops for the Camry and Prius. Light truck demand skidded 17 percent.
Toyota’s last drop this steep was in September 2011, when it was still reeling from the March 2011 earthquake and tsunami in Japan
Nissan deliveries fell 18 percent. Volume was down for the ninth straight month – 15 percent -- at the Nissan division, while Infiniti collapsed 44 percent. The company continues to dial back on fleet sales and incentives.
Honda’s decline marked its biggest drop since December 2011. It had a 15 percent slip in car deliveries and a 14 percent decrease in light-truck volume. Sales fell 14 percent at the Honda brand and 18 percent at Acura.
Volume dropped 13 percent to 44,619 at Kia, ending a streak of 11 straight gains, and marking the brand's biggest drop since sales dropped 21 percent in Dec. 2017.
Subaru's U.S. sales fell 9.4 percent, snapping a streak of 93 consecutive monthly gains, even as the company hiked incentives. Subaru officials cited "the rapid sell-down of the last generation Legacy and Outback" for the end of the streak.
Hyundai posted its decline behind weaker car deliveries, even as crossover volume rose 9 percent to a record 27,374 for the month. The drop snapped a 13-month streak of year-over-year monthly gains.
With an expanded crossover lineup, Hyundai has focused on retail volume and reduced fleet business.
Among other automakers, September volume dropped 11 percent at Mazda but edged up 0.2 percent at Mitsubishi.
Results were mostly positive for other luxury brands, with September volume rising 6 percent at BMW, 4.5 percent at Mercedes-Benz, 7.5 percent at Land Rover, 2.2 percent at Porsche and 7 percent at Volvo. Deliveries dropped 1.9 percent at Jaguar.
After falling in each of the first six months of the year, industry sales rose in July and August and had slipped an estimated 0.3 percent through August, according to the Automotive News Data Center.
Through September, industry light-vehicle sales were down 1.6 percent to 12,730,083 units.
Detroit 3, quarterly
The latest quarter was the first in which each of the Detroit 3 reported on a quarterly basis.
GM said all four of its brands posted gains in the July-September period, leading the automaker to a 6.3 percent increase to 738,638 deliveries. Chevy sales rose 4.6 percent to 507,273 units. GMC posted an 11 percent gain to 140,789 vehicles. Buick rose 10 percent to 50,615 vehicles. Cadillac gained 7.2 percent to 39,961 deliveries.
Ford said its U.S. sales for the third quarter fell 4.9 percent to 580,251 vehicles. Pickup and van sales rose 8.8 percent while utility-vehicle sales fell 10.5 percent and sedans plunged 29 percent.
FCA said third-quarter sales rose a fraction, by 527 vehicles, to 565,045. Ram was the only brand to gain ground, surging 15 percent, while Jeep deliveries dropped 2 percent. Chrysler, Dodge, Fiat and Alfa Romeo also recorded drops.
While employment gains, wage growth and moderate gasoline prices continue to support sales, higher prices and borrowing costs continue to weigh on consumer demand, analysts say.
“As the global sales outlook continues to weaken, light-vehicle demand in the U.S. remains robust,” said Jeff Schuster, head of global vehicle forecasts at LMC Automotive. “This is despite the headwinds and uncertainty caused by rising tensions with Iran, the UAW strike at GM and ongoing trade concerns.”
With some consumers priced out of the new-vehicle market, automakers have countered the decline in retail demand with higher fleet shipments.
A 9.1 percent increase in fleet sales has largely offset a 4.7 percent decline in retail purchases and a 2 percent drop in leases through August, Cox Automotive said.
Among brands, Ford, Ram, Mitsubishi, Volkswagen and Jeep have posted higher fleet shipments this year, Cox said, while fleet volume has dropped at Chrysler, Hyundai, Kia, Nissan and Chevrolet.
Average incentive spending per unit in September is expected to reach $4,208, up from $4,014 last year, J.D. Power said. ALG estimates average discounts rose 4.9 percent to $3,975 last month from September 2018. (See chart below.)
- There were 23 selling days last month vs. 25 days in September 2018.
- The average interest rate for a new-vehicle loan fell for the sixth month in a row and stayed under 6 percent for the third month in a row in September, Edmunds said. The annual percentage rate on new financed vehicles averaged 5.7 percent last month and a low for the year, compared to 5.8 percent in Sept. 2018.
- Days to turn, or the average number of days a new vehicle sits on a dealership lot before being sold to a retail customer, was 75 days through Sept. 22, up 7 days from a year earlier, J.D. Power said.
- September fleet deliveries are expected to total 236,900, an increase of 4 percent from September 2018, J.D. Power predicts. Fleet volume is expected to account for 19 percent of total light-vehicle sales, up from 17 percent last year.
“All year long we’ve been talking about high prices and rising interest rates keeping shoppers on the sidelines, but in the third quarter those pressures eased up just enough to get consumers back in a buying mood. If this momentum continues, we expect a solid finish to the year.”
-- Jeremy Acevedo, Edmunds’ senior manager of industry analysis
“Automakers are in full sell-down mode, which means that car shoppers got to take advantage of some decent promotional offers in September. The cost of purchasing a new vehicle is still a lot higher than it was a few years ago, so it’s a positive sign that automakers and dealers are making the right moves to keep buyers coming back into the fold.”
-- Jessica Caldwell, executive director of industry analysis at Edmunds