Q3 sales edge up at Ford, slip at GM, Nissan; Stellantis woes continue; Sept. volume off at Toyota, Honda

The U.S. light-vehicle market is idling as the fourth quarter gets underway, with lackluster sales at the three biggest automakers and mixed results at others.

Light-vehicle sales slid 13 percent to 1.17 million last month, GlobalData said Oct. 2 in a preliminary report, with retail sales of 946,000 and fleet shipments of 219,000, or 18.8 percent of volume.

The seasonally adjusted, annualized rate of sales was 16.1 million in September, Motor Intelligence said, up from a sales pace of 15.19 million in August and September 2023's pace of 15.73 million.

The latest results signal a market that is struggling to click into a higher gear, GlobalData said, as the key fourth quarter begins.

Third-quarter deliveries slipped 1.9 percent at General Motors on weaker Chevrolet volume, though the automaker said it posted its ninth consecutive quarter of year-over-year retail sales gains, helped in part by a surge in electric vehicle volume.

Sales dropped 6.1 percent at Chevrolet last quarter, with large pickup and SUV deliveries down, but rose 7.8 percent at GMC, 6.4 percent at Buick and 4.4 percent at Cadillac. Sales at Chevrolet, GM's biggest division, have fallen four straight quarters, largely on lower fleet business.

Toyota Motor Corp., with some of the lowest inventory levels across the industry, said September volume slid 20 percent. Deliveries fell 21 percent at the Toyota brand and 15 percent at Lexus, snapping a streak of 19-straight monthly gains at the luxury brand. In addition to stop-sale orders on key crossover models, volume fell by double digits for two top sellers: the RAV4, down 18 percent, and the Corolla, off 31 percent. Toyota brand sales have dropped four consecutive months.

Ford Motor Co. managed a 0.7 percent gain in third-quarter sales behind a 6 percent rise in pickup volume.

Sales fell 0.4 percent at the Ford division and rose 26 percent at Lincoln last quarter. Third-quarter EV sales rose 12 percent and hybrid deliveries jumped 38 percent, the company reported. The automaker's sales have climbed seven-straight quarters.

Stellantis' struggles continued in the third quarter, with volume dropping 20 percent on weaker Jeep and Ram sales. It was the company's fifth-straight decline in year-over-year quarterly volume. Deliveries fell 6.2 percent at Jeep, 19 percent at Ram, 43 percent at Dodge, 47 percent at Chrysler and 29 percent at Alfa Romeo. Only Fiat, with sales of 316, posted a gain during the latest quarter.

In addition to lowering inventory, the company has faced pressure from dealers to offer more competitive incentives.

Matt Thompson, head of U.S. retail sales for Stellantis, credited an aggressive incentive program, hatched with dealer input, for reducing inventory by 50,000 last quarter and boosting market share from 7.2 percent in July to 8 percent in September.

“These cross-brand incentives ... will continue through the end of the year," Thompson said. "We continue to take the necessary actions to drive sales and prepare our dealer network and consumers for the arrival of 2025 models.”

Honda Motor Co. cited supply constraints, weather and fewer selling days for snapping its streak of 18-straight monthly sales gains. September volume fell 7 percent at Honda and 22 percent at Acura. Sales of Honda's top sellers fell across the board; the Civic and CR-V were each down 16 percent, the HR-V was off 15 percent, and Accord deliveries fell 20 percent.

U.S. light-vehicle sales fell at Hyundai and Kia in September even as demand for electrified models remained healthy.

Hyundai said deliveries dropped 9 percent last month, though hybrid deliveries rose 36 percent, with overall third-quarter volume rising 5.2 percent to 210,971.

Randy Parker, CEO of Hyundai Motor America, said the company planned "to close the year strong and set another all-time annual sales record.”

At Kia, volume dropped 12 percent last month, though it said EV sales jumped 43 percent, helped by the new EV9, and plug-in hybrid volume rose 11 percent. The company's U.S. sales have declined seven out of nine months this year, with year-to-date volume now off 3.4 percent at 584,170.

Deliveries fell for the second-straight quarter at Nissan Motor Co., behind a drop of 1.4 percent at the Nissan brand and 12 percent at Infiniti, mostly on weaker light-truck sales.

Subaru eked out a 0.1 percent gain last month on sales of 56,414, enough to stretch its streak of monthly gains to 26.

Sales rose for the fifth-straight month at Mazda behind a September gain of 6.5 percent.

Volkswagen's third-quarter sales increased 6.2 percent on higher Atlas, Atlas Cross, Tiguan and Jetta volume.

Among luxury brands, third-quarter sales dropped 6.9 percent at BMW, 12 percent at Volvo and 22 percent at Audi, its third-straight decline, and Genesis reported sales fell 1.6 percent last month, with year-to-date sales up 2.5 percent.

Mercedes-Benz, Porsche and JLR will report third-quarter results later in the month.

U.S. light-vehicle sales were projected to fall in September and the third quarter, as the market cooled from a stronger first half. Elevated new-vehicle pricing, tighter credit conditions and higher borrowing costs continue to weigh broadly on the retail market, analysts say.

Hurricane Helene, which battered Florida and caused catastrophic flooding in parts of Georgia, South Carolina, North Carolina and Tennessee, also disrupted sales late in the month, a key period for showroom traffic.

Higher leasing, daily rental and commercial fleet deliveries have offset weaker retail sales this year.

It would be the second consecutive quarterly decline after sales rose 5.6 percent in the first quarter.

The latest monthly and third-quarter results indicate the market continues to perform below expectations, Cox Automotive said, with momentum fading in the second half of September, particularly in the Southeast.

"Affordability remains the main hurdle in the market today," said Charles Chesbrough, senior economist for Cox Automotive.

Analysts expect the market to remain volatile the rest of the year, also due in part to uncertainty over the outcome of the U.S. presidential election in November. And a prolonged strike by dock workers at ports along the East Coast and Gulf of Mexico could disrupt fourth-quarter shipments of imported light vehicles.

Car Pros Automotive Group CEO Matthew Phillips said the third quarter was brisk for his company, which spans nine dealerships under the Honda, BMW, Mini, Kia and Hyundai brands in Washington state and Southern California.

"Our group didn't set any records, but we were pretty happy with the performance," Phillips said. "I'm pretty optimistic that going into the end of the year, with some interest rate reductions, and once we get through this election, no matter what happens, we're going to have a great Q4."

Morgan Stanley analyst Adam Jonas — citing average monthly vehicle payments that top $700 — warned that new light vehicles are still too expensive for U.S. consumers, keeping many on the sidelines or looking at used cars.

The ability of U.S. households to purchase a new vehicle is "very stretched" Jonas said in a Sept. 25 report in which he downgraded the shares of GM and Ford.

"Industry structure has not changed," he wrote. "Inventory is at pre-COVID levels. Japanese, Korean and EV names are gaining share. Others are squeezed. U.S. has all the burden with falling prices, falling mix, rising costs and lower share."

The average annual percentage rate on a new vehicle was 7.1 percent in the third quarter, Edmunds said, marking the sixth consecutive quarter that new-vehicle finance rates have hovered above 7 percent.

Edmunds, citing an August survey, said 62 percent of car owners planning to buy a new vehicle in the next year have delayed a purchase because of high interest rates.

S&P Global Mobility last month lowered its 2024 U.S. sales forecast to 15.9 million vehicles from 16 million and said its outlook for North America light-vehicle output was also trimmed, to 15.5 million, reflecting delayed vehicle launches and production cuts by some automakers to trim inventories.

New-vehicle sales are also being hampered by a reduction in vehicles coming off lease. J.D. Power and GlobalData estimated the number of leases that expired in September was 13 percent lower than in August and 28 percent below September 2023 levels.

"Fewer expiring leases mean fewer opportunities for new sales," said Thomas King, president of the data and analytics division at J.D. Power.

New-car and light-truck supplies totaled 2.8 million last month, about 40 percent higher than a year earlier, according to Cox Automotive, with average days' supply at 77. Inventory approached 4 million in the spring of 2019 and was often above 3.5 million before the pandemic halted production.

GM said it has about 627,000 vehicles in U.S. inventory heading into the fourth quarter and is on pace to end the year with a 50- to 60-day supply.

At the brand and model level, inventory remained mixed, with some Toyota and Subaru models, as well as many gasoline-electric hybrids, in short supply, while electric vehicle stockpiles remained mostly high. Some Toyota dealers say customers are waiting up to three months for a hybrid.

Just eight brands — Lexus, Toyota, Honda, Subaru, Kia, Acura, Volkswagen and Porsche — had a days' supply figure below the industry average last month, Cox Automotive data showed, while Polestar, Fiat, Mini, Jaguar, Ram, Alfa Romeo, Lincoln, Dodge, Volvo and Jeep had the highest supplies.

Vehicle prices are in retreat but remain 20 percent higher than before the COVID-19 pandemic and the microchip shortage.

Transaction prices were on pace to average $44,467 last month — down $1,296, or 2.8 percent, from September 2023, J.D. Power and GlobalData estimated.

Prices are falling because of rising manufacturer incentives, larger retailer discounts and increased availability of lower-priced vehicles.

Automakers and dealers continue to ratchet up deals to coax retail buyers off the sidelines.

The average incentive per new vehicle jumped 63 percent from September 2023 and was on track to reach $3,047 last month, J.D. Power and GlobalData estimated. And incentives, expressed as a percentage of sticker price, will tally 6.2 percent, an increase of 2.4 percentage points from a year earlier.

Average per-vehicle incentives topped $3,000 this year through September at brands including Jeep ($3,243), Nissan ($3,639), Ford ($3,681), Tesla ($3,813), GMC ($3,986), Ram ($5,441) and Volkswagen ($4,165), according to Motor Intelligence, while Chevrolet ($2,986), Kia ($2,942), Hyundai ($2,825), Mazda ($2,875), Honda ($2,279), Subaru ($1,949) and Toyota ($1,379) were below $3,000.

• There were 23 selling days last month versus 25 in September 2023.
• Pickups, crossovers, SUVs and other light trucks were on pace to account for 80.8 percent of retail sales last month, J.D. Power and GlobalData forecast.
• Fleet shipments were expected to tally 204,416 in September, up 9.2 percent from September 2023, GlobalData and J.D. Power estimated, while fleet volume was on track to account for 17.5 percent of total light-vehicle volume, up 1.8 percentage points from a year earlier.
• More consumers are agreeing to longer loan terms to counter higher new-vehicle prices. Edmunds said 69 percent of new-vehicle loans had terms over 60 months last quarter, and 84-month auto loan terms are on the rise, accounting for 18.1 percent of new-vehicle loans in the third quarter, compared with 17.3 percent in the second quarter and 15.8 percent in the first quarter.
• New-vehicle buyers are taking on $1,000-plus monthly payments at near-record levels: The share of consumers taking on loans with payments of $1,000 or more was 17.4 percent last quarter, Edmunds said, marking the sixth consecutive quarter that share was above 17 percent.

"This is an overall healthy place for the industry to be in compared to automakers' pre-pandemic habits of overproduction and inventory glut. It unfortunately has also limited potential discounts or promotions for shoppers."

— Jessica Caldwell, Edmunds' head of insights

Jack Walsworth contributed to this report.