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Mayank Marwah
Mayank Marwah
Articles (991) 

What You Need to Know About US Car Sales

Automakers recorded year-over-year sales declines, but showed improvement from the previous quarter

Major automakers have reported quarterly sales over the past several days. U.S. auto sales dropped 9.3% in the third quarter, which reflects a recovery from an over 30% sales decline recorded in the second quarter. High retail sales coupled with strong sales of SUVs and pickups led to a relatively smaller decline in the quarter.

All automakers reported year-over-year sales declines, but the decrease was slimmer than what was projected and also increased sequentially.

General Motors

General Motors Co. (NYSE:GM) released third-quarter sales on Oct. 1. The Detroit-based automaker delivered 665,192 vehicles in the third quarter, down 10% year over year. Analysts had expected a decline of 13.5%. Crossover sales were strong, led by an impressive performance from the Chevrolet Trailblazer and Buick Encore GX. Both these models captured an 11% combined retail market share in the small SUV segment. The company's retail sales, or sales to individual customers, were flat as compared to the year-ago period. The company registered sales declines for all four of its brands: Chevrolet, Cadillac, Buick and GMC.

Ford

Ford Motor Co. (NYSE:F) released its third-quarter sales report on Oct 2. The automaker sold a total of 551,796 vehicles, down 4.9% from the year-ago quarter. The company, however, edged past projected declines of 10%. Sales surged 8.3% for trucks, while it declined 3.4% for SUVs and 31.3% for passenger cars. Trucks are a profitable segment for automakers, especially for Ford since the F-Series has been the top-selling pickup in the U.S. for 43 years. The combined pickup sales of F-Series and Ranger jumped a combined 4% to 249,997 units. Explorer sales gained roughly 74% during the quarter. Lincoln sales increased 10.2%.

Fiat Chrysler Automobiles

Fiat Chrysler Automobiles NV (NYSE:FCAU) said its sales during the third quarter plunged 10% year over year to 507,351 units. Analysts had predicted an 11.8% sales decline. Strong retail sales almost negated poor sales to fleet customers. The Ram brand sold well, gaining 15% year over year, at retail. Additionally, Jeep brand sales were strong during the quarter, led by solid demand for the Gladiator and Wrangler. Quarterly sales came in 38% higher than the previous quarter due to strong retail demand.

Performance of International automakers

Toyota Motor Corp. (NYSE:TM) reported a third-quarter sales decline of 11%. In contrast, sales improved 16% in September.

Nissan Motor Co.'s (NSANY) third-quarter sales tumbled 32.4% year over year to 221,150 units. The company further broke down the numbers into a 36% decline in car sales and a 30.7% for truck sales, or a 32.6% decline in the Nissan division and a 30.2% decline in the luxury Infiniti division.

Honda Motor Co.'s (NYSE:HMC) sales were down 9.5% in the quarter to 388,433 units, citing a sales decline of 17.6% for cars and 3.1% for trucks, or 10.6% decline for the Honda division and 1.6% gain for the luxury Acura division.

Last word

Low interest rates have led to high consumer spending on new cars. However, low customer confidence as a result of rapid unemployment as well as lack of stimulus checks for furloughed and laid off workers will have an adverse impact on the demand for cars going forward. Chief Economist Jonathan Smoke said in a statement, "The auto market enjoyed a strong and profitable third quarter, but with the economy losing momentum as fiscal support wanes, we can't expect the sales pace to continue."

Disclosure: I do not hold any positions in the stocks mentioned.

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About the author:

Mayank Marwah
A seasoned writer with keen interest in the automotive, technology, telecommunication, retail and aerospace sectors.

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