Ford, Toyota, Honda, Hyundai, Kia sales slip again

Ford Motor Co.'s U.S. sales fell 4 percent in October, marking the automaker's fifth straight monthly decline, while deliveries at Toyota Motor Corp., Honda Motor Co., Hyundai and Kia fell for the third consecutive month as tight chip supplies and other bottlenecks continue to undermine light-vehicle output and dealer stockpiles.

In a signal the market may have bottomed out, the seasonally adjusted, annualized rate of sales came in at 13.1 million, Motor Intelligence and Morgan Stanley said Wednesday, near the high end of forecasts -- 11.8 million to 13.5 million -- from Cox Automotive, J.D. Power/LMC Automotive and TrueCar. The SAAR hit 16.44 million in October 2020 and had fallen each month to a low this year of 12.27 million in September since hitting a 2021 high of 18.5 million in April.

Morgan Stanley analyst Adam Jonas said industry sales fell 23 percent last month, also within the range of forecasts, with light trucks accounting for 81 percent of volume.

Sales dropped 3.3 percent at the Ford division and 17 percent at Lincoln, with the automaker's latest overall decline the smallest this year. Ford's biggest sellers also posted declines, led by the F-series pickup, down 4.7 percent. Overall, Ford Motor Co. said truck sales fell 7 percent while crossover and SUV deliveries rose 13 percent, helped by new models such as the Mustang Mach-E, Bronco Sport and Bronco.

Ford said gross inventory continued to grow last month, increasing by 7,000 over September levels to total 243,000 at the end of October. 

Toyota Motor, which has been forced to cut global output in recent months, said sales dropped 29 percent in October, with volume off 31 percent at the Toyota division and 15 percent at Lexus.

It was the third straight monthly, and biggest, drop in Toyota brand volume and second consecutive monthly decline at Lexus.

The Toyota brand's biggest sellers all posted double-digit declines: Camry, off 40 percent; RAV4, down 39 percent; Tacoma, off 38 percent; Highlander, down 19 percent and Corolla, off 61 percent.

Toyota Motor ended October with 111,224 Toyota and Lexus vehicles in dealer stocks and transit, up from 98,724 at the end of September, a spokesman said.

October volume dropped 24 percent at American Honda, with deliveries falling 23 percent at the Honda division and 27 percent at Acura.

Like Toyota, some of the Honda brand's biggest sellers posted notable declines for the month: Accord, off 20 percent; Civic, down 39 percent; CR-V, off 22 percent and Pilot down 19 percent. Only two Honda models posted gains: the Insight, up 41 percent to 1,939, and the HR-V, up 57 percent to 11,667.

Deliveries slipped 1.1 percent at Hyundai, though the company said retail volume rose 1 percent to an October record of 52,767.

A Hyundai spokesman said the company's dealer stock stood at 19,894 at the end of last month, off 26 percent from 26,717 at the close of September and down 86 percent from 142,616 at the end of October 2020.

Kia deliveries dropped 7.2 percent to 52,067, with 82 percent of the company's inventory sold during the month.

"Despite ongoing supply chain issues and chip shortages, we expect our available supply and robust customer interest will help us have a strong finish to the year," Eric Watson, vice president for sales operations at Kia America, said in a statement.

Subaru saw deliveries skid for the fifth straight month behind a 40 percent drop in volume last month.

Every Subaru nameplate but the WRX/STI posted a decline, with sales of the top-selling Forester plunging 67 percent to 4,820.

Thomas J. Doll, CEO of Subaru of America, blamed the latest results -- the company's sharpest decline of the year -- on "a severe shortage of semiconductor chips and other key components that directly impacts our vehicle production."

Genesis said deliveries rose 403 percent last month to 5,300, with the luxury brand's two crossovers once again combining to easily outsell combined sales of the company's three sedans.

Mazda reported lower sales for the second straight month, with October deliveries down 14 percent. Volume dropped for the second straight month at Volvo, with sales off 19 percent. Combined sales at the seven major automakers that release monthly results dropped 17 percent in October. The rest of the industry releases sales on a quarterly basis.

Sales were forecast to fall 20 to 30 percent last month compared with October 2020, Cox Automotive, J.D. Power/LMC Automotive and TrueCar estimate.

The market has increased 13 percent this year through September, with first and second quarter volume rising, but third-quarter sales off 13 percent.

Car and light-truck inventory levels remained below 1 million for the third straight month in October, J.D. Power said.

The average number of days a new vehicle sat on a dealer lot before being sold was on pace to fall to a record low of 20 days last month, down from 49 days a year ago and down from 23 days in September, J.D. Power said.

With inventories at historic lows, and consumer demand healthy, dealers and automakers continue to slash discounts, driving transaction prices higher to record levels. (See chart below.)

Average incentive spending per unit in October is expected to reach a record low of $1,628, down from $3,499 in October 2020 and $4,038 in October 2019, J.D. Power and LMC said. Average incentives, as a percentage of the average MSRP, are expected to fall to a record low of 3.7 percent last month, a 4.7 percentage point decline from October 2020 and down 6.2 percentage points from October 2019.

TrueCar estimates average incentives per vehicle will fall 39 percent to $2,277 in October from October 2020. (See chart above.)

But the decline in spiffs is not uniform across key segments.

Valeri Tompkins, senior vice president at TrueCar, said finance offers on full-size pickups have increased noticeably, helping the segment account for almost 25 percent of new-vehicle deliveries, a dramatic increase from 15 percent in May.

Throughout the chip crunch, automakers have prioritized output of large pickups, some of the industry's most profitable vehicles. Ford and Ram are among automakers offering 0 percent financing for 72 months on large pickups. At the same time, competition in the segment is increasing with a redesigned Toyota Tundra and the industry's first electric pickup, the Rivian R1T, on the horizon.

• There were 27 selling days last month vs. 28 in October 2020.
• The average new-vehicle retail transaction in October was expected to reach a record $43,999, J.D. Power said, up from the previous record of $42,921 in September.
• Average incentive spending per truck, SUV and crossover in October is expected to be $1,595, off $1,943 from a year ago and down $2,558 from 2019, J.D. Power said, while the average spending on car spiffs is expected to be $1,764, a decline of $1,603 from a year ago and down $1,944 from 2019.
• Fleet sales are expected to total 142,000 in October, a drop of 15 percent from October 2020 and down 36 percent from October 2019 on a selling day adjusted basis. Fleet deliveries are forecast to account for 13 percent of total light-vehicle volume in October, flat from 13 percent a year ago, J.D. Power said.
• The average interest rate on a new vehicles last month was 4.3 percent, TrueCar said, and the average loan term was 70 months.