Hurricane Harvey and highest discounts in US history did the trick.
After eight months in a row of year-over-year sales declines, September was finally the month everyone has been waiting for. It was powered by sharply higher fleet sales and soaring truck sales, much of it related to Hurricane Harvey, and it was fueled by the highest incentives ever in the history of US auto sales. GM, Ford, and Toyota were the biggest winners. Fiat-Chrysler and Hyundai got crushed.
What we got…
- Total new vehicle sales rose 6.1% year-over-year to 1.52 million units (sold and delivered by dealers to their customers, or delivered by automakers directly to large fleet customers).
- Year-to-date sales are still down 1.8%. Despite the 88,174-unit sales gain in September, year-to-date sales remain down by 232,614 units compared to last year.
- Sales of cars fell 3.3%. The relentless decline continues, as Americans are shifting from cars to trucks, particularly small SUVs (crossovers). Year-to-date, car sales are down 10.5%.
- Sales of trucks – pickups, SUVs, crossovers, and vans – soared 12.4% to 967,547 units, accounting for 63.4% of total sales. Year-to-date, truck sales are up 4.4%.
- The seasonally adjusted sales rate (SAAR) rose to 18.6 million vehicles in September, the highest by far over the past 12 months.
- Incentives averaged $4,048 per vehicle in September, the highest ever, according to research firm J.D. Power.
General Motors sells trucks, but forget cars.
GM’s total sales jumped 11.8% in September to 279,176 units but are still down 0.8% year-to-date.
- Car sales are still in collapse mode, plunging 11.4% for the month to 67,089 units. They’re down 18.4% for the year so far.
- Trucks sales soared 21.9% to 212,087 units, and are up 6.7% year-do-date.
- By brand: Chevrolet +17% (199,801); GMC +9% (47,329); but Buick, which is moribund in the US, -20% (16,737); and Cadillac +1% (15,530).
- Inventory on dealer lots dropped to 76 days’ supply at the end of September, from 88 days in August and 104 days in July. That’s still above 60 days’ supply, considered the upper limit of healthy, but it’s moving in the right direction.
Ford F-series trucks shine, the rest not so much.
Total sales rose 8.9% to 221,643 vehicles, though they remain down 2.7% year to date. Mark LaNeve, Ford’s VP of sales and service, pointed at post-hurricane replacement sales: in the Houston metro, Ford dealers sold 5,000 vehicles more than a year ago. That’s 27% of Ford’s national sales gain of 18,200 vehicles.
- Truck sales jumped 12.3% to 171,725 units and are up 3.0% for the year, with SUV sales edging up 1.8% to 68,705 vehicles (after dropping 11% in August!), and with F-series trucks soaring 19.9% to 103,625 units.
- Car sales dropped 1.3% to 49,918 vehicles and are down 17.3% year to date.
- Retail sales rose 4.4% to 169,544 units. Fleet sales soared 25% to 52,704 units.
Fiat-Chrysler gets crushed.
FCA US total sales dropped 9.7% to 174,266 and are down 7.9% for the year so far.
- Even truck sales dropped 6.8% to 152,543 and are down 5.1% for the year, getting worse by the month.
- Car sales collapsed 25.5% to 21,723 units and are down 22.8% year-to-date. It looks like FCA is throwing in the towel on cars.
- The fiasco by major brand: Ram sales were flat, Jeep sales fell 4%, Chrysler sales plunged 16%, and Dodge sales plummeted 30%.
- Fleet sales collapsed by 41% to just 27,362 units. Retail sales were flat.
Winners and losers among other major automakers.
Toyota total sales jumped 14.9% to 226,632 units and are up 0.5% for the year. This put Toyota in second place in sales, behind GM and ahead of Ford.
- Car sales inched down 0.5% to 91,886 and are down 11.3% for the year. Toyota is by far the largest car seller in the US, 84% higher than Ford, 37% higher than GM’s, and four times higher than FCA.
- Truck sales – they’re hot in Texas – skyrocketed 28.5% to 134,746 and are up 11.4% for the year.
Honda total sales rose 6.4% for the month to 142,722 and are about flat for the year.
- Car sales soared 13.5% to 73,292 but remain down 2.5% for the year. Honda is the second largest car seller in the US, behind Toyota.
- Truck sales inched up 0.5% for the month to 69,430 and are up 3.2% for the year.
Nissan total sales rose 9.5% for the month to 139,932, but are up 1.1% for the year.
- Car sales fell 4.1% to 62,298 and are down 11.4% year-to-date.
- Truck sales soared 23.5% to 77,634 and are up 15.7% year-to-date.
Subaru total sales edged up 0.4% to 55,120 and are up 7.2% year-to-date. Car sales, though they fell 4.6% for the month to 29,367, are up 9.1% for the year. Not every automaker suffers from plunging car sales! Truck sales rose 6.7% to 25,753 for the month and are up 4.7% for the year.
Hyundai Motor Group, oh my! The conglomerate includes Hyundai and Kia.
- Hyundai total sales plunged 14.4% to 57,007, by far the worst plunge of the major automakers. Year-to-date, sales are down 12.9%. Car sales crashed 26% in September, to 35,469. But truck sales rose by a hefty 15.3% to 21,538 units.
- Kia total sales rose 6.6% to 52,468 units, but remain down 6.9% so far this year. Car sales jumped 15% to 36,508, but truck sales dropped 8.6% to 15,960. Year-to-date, truck sales plunged 18%, which takes some doing in truck-focused America.
Volkswagen Group sales soared 22.8% to 51,666. This includes Audi, Volkswagen, Bentley, and Lamborghini. Year-to-date, sales are up 7.8%.
Daimler sales dropped 2.2% to 32,337 and are down 3.0% year-to-date.
BMW sales inched down 0.2% to 29,428 and are down 5.1% year-to-date. This includes BMW, Mini, and Rolls Royce. Rolls sales jumped 55% to a whopping 121 cars. BMW sales inched up 0.7% and Mini dropped 7.2%.
A special word about Tesla: Its sales are too small to matter – despite the hoopla on Wall Street of its ludicrous $57 billion market capitalization. With only 3,350 units sold in September, when the industry sold 1,523,867 units, it has a market share of a nearly invisible 0.2%. Porsche sold more vehicles than Tesla did. But here is the interesting thing: In September, sales fell 6.9% year-over-year. Now we’re holding our breath for a Model 3 miracle or perhaps a colony on Mars.
Hurricane Harvey is pulling vehicle sales way up in the affected areas. This didn’t start on September 1 but later in September, and with a vengeance.
As soon as the hurricane had blown over, a mad scramble ensued to bring new vehicles, particularly trucks, from around the US into the affected area to replace the flood units on dealer lots. Some dealers, after having been closed for a week or so, reported surging sales volume, and they’re working furiously to satisfy the demand. Since there were some days at the beginning of September with essentially zero sales, I don’t think that the current surge in sales is fully reflected in the September numbers. October will show the full brunt of that post-hurricane demand.
As expected, the area will have blistering sales going forward. Given how large the Houston metro is, it will impact national figures for months to come. But this may still not be enough to pull overall US new vehicle sales out of their funk for the year.
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