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Customer LoginsUS auto sales dip 4.4% y/y in October, with YTD also down
US auto sales in October slipped 4.4% year on year (y/y), pulling the year-to-date (YTD) total down 0.1% y/y. Ford Motor Company's sales figures have been delayed, but based on estimates IHS Automotive expects the seasonally adjusted annual rate (SAAR) to improve over September's 17.7 million.
IHS Markit Perspective
- Significance: US auto sales in October dropped an estimated 4.4% year on year (y/y), as Ford Motor Company has yet to report its sales. Despite the volume decline, the seasonally adjusted annual sales rate (SAAR) is estimated to have improved from September 2016, although a final figure is not available at time of writing. Year to date (YTD), the market is down 0.1% y/y, and it looks likely to come in slightly behind 2015's record total.
- Implications: Although final figures are delayed by an issue at Ford, the October SAAR is expected to rise above September's 17.7 million units and push above July's 17.8 million.
- Outlook: An improved industry SAAR pace is set to break the monthly see-saw pattern in place since June. The pace of light-vehicle demand in the second half of 2016 is poised to be higher than in the first half of the year. Although incentives and fleet sales continue to rise and need to be monitored, both should help spur demand throughout the rest of the year. Our light-vehicle sales projection for full-year 2016 is 17.4 million units, down slightly from the record 2015 level.
Detroit automakers
GM had a target to reduce rental car sales in 2016 between 80,000 and 90,000 units and for a fleet mix target of about 20%. This affected sales over most of the year. In October, fleet sales contributed 19.5%. However, in a call with IHS Automotive in mid-July, GM said that year-on-year (y/y) comparisons for rental would start to level out. GM is also looking to operate with about 70 days' supply in most months, but that figure has been crawling up for several months. While at the end of July, GM had 66 days' supply, by the end of October that figure reached 84 days.
GM's sales slipped only 1.7% in October but are down 3.6% year to date (YTD). Buick sales gained 7.4% in October, with declines for the Enclave, LaCrosse, Regal, and Verano offset by the addition of the Envision and gains for Encore. In the YTD, Buick is up 1.8%. New products are driving a stronger year end for Buick - and some of the LaCrosse decline is on model changeover. The decision to drop the Verano after a short 2017-model-year run will impact Buick into 2017. Cadillac sales slipped again in October, by 9.4% y/y, and are down 5.6% YTD. The XT5, which replaces the SRX, registered 4,989 units sold in October, failing to surpass SRX sales in October 2015. The only Cadillac products to post improved sales in October were the Escalade and Escalade ESV. Chevrolet's volume was flat, down 0.8% y/y in October and 3.7% YTD, notably impacted by the fleet reduction. The new-generation Cruze's trend is healthier, with a 9% y/y sales gain in October. High-margin GMC sales dropped 6.2% in October and 4.7% for the YTD. Though GMC shows a decline, GM says it has a monthly average transaction price of USD43,988, up USD1,800 from a year earlier, and Denali-trim vehicles accounted for more than 25% of sales.
Ford Motor Company has had a volatile 2016 and its October sales are estimated to have recorded another decline. For the purposes of this report, we are using estimated data from IHS Automotive data sources. Ford's corporate sales are estimated to have slipped 2.3% y/y in October to 208,259 units, with the Ford brand down 2.7% and Lincoln up about 8.3%. Ford's YTD sales are estimated to have crept up 0.3%. We will update with a more detailed discussion of Ford's results when they are made available.
As noted with July results, FCA US has adjusted its reporting methodology. FCA sales slipped 10.3% y/y in October but are up 2.1% in the YTD. Under the new methodology, in October only the Ram gained (up 11.5%), while Jeep registered a second consecutive decline (down 6.6% y/y), Dodge a 16.4% drop, Chrysler a 44.7% plunge, and Fiat a 24.3% decrease. In October 2016, FCA sold 49,443 trucks and LCVs, 86,172 utility vehicles, and 40,994 cars and MPVs. Sales of utility vehicles were down 5.3% while truck and LCV sales gained 11.5%, and cars and MPV sales fell 33.4%. FCA has announced its intention to drop the Chrysler 200 and Dodge Dart and will rely on trucks and SUVs for most of its North American sales. Fiat brand sales declined despite the new 124 Spider. At Dodge brand, only Journey posted a real increase - although the brand sold one more Viper in October 2016 than in October 2015. Sales of the all-new Pacifica totalled 7,758 units, down from nearly 10,000 in September 2016 and from the 12,286 Town & Country minivans sold in October 2015.
Japanese automakers
In its patchy 2016, Toyota swung to an 8.7% decline in October 2016 and is down 3.0% for the first 10 months. Toyota Division car sales dropped 10.7%. Toyota now reports sales for Scion products, rebadged Toyotas for the 2017 model year, with its Toyota nameplates, with all showing declines in October. The only cars to show a gain in October were the Corolla sedan (the Corolla IM, rebadged from Scion, recorded a 6.8% decline) and Yaris Liftback. Camry sales dipped 8.5% to 29,562 units but were ahead of the RAV4's October sales of 26,429 units (down 6.5%). Toyota Division trucks were down 1.0%, with SUV sales up 2.0% and pickup sales up 2.7% on better inventory of the Tacoma. At Lexus, car sales tumbled 19.7% and truck sales gained 6.1%.
American Honda sales dropped 4.2% in October 2016, about even with the estimated overall market decline for the month, with YTD sales up 2.6% y/y. Honda Division sales were down 2.0% at 113,292 units, while Acura sales fell 20% to 12,869 units. Honda's car lines continued to barely outperform SUVs in October (56,719 cars versus 56,573 trucks) on volume. The truck side is helped by the all-new Ridgeline. However, the CR-V outsold the all-new Civic again, making it the best-selling Honda for the month and still keeping Civic off the top spot in YTD figures. CR-V demand gained 4.4%, facing a freshened Ford Escape and all-new Kia Sportage, and with the next-generation model revealed during October. Acura, which continues to post 70% of its sales from the MDX and RDX, registered SUV sales up 8.4% and car sales down 50.2%.
Nissan Group's sales slipped 2.2% in October, unable to retain its temporary lead over Honda. Nissan Division sales were down 2.5% and Infiniti sales flat at 0.6%. Nissan Division car sales fell 14.5%, while trucks were up 12.7%. Infiniti's car sales gained 1.4%, with an updated Q50 and new Q60 coupé, while SUV sales were level with October 2015.
Subaru delivered a 59th consecutive month of y/y growth, with a 4.1% gain. As earlier in 2016, the BRZ, Impreza, and WRX registered lower sales. A combination of struggling sales at VW and gains at Subaru has enabled Subaru to outsell the VW Group, breaching the 500,000-unit barrier a month earlier this year. Mazda sales dropped 10.8% in October and are down 7.6% YTD. The company's car lines all are experiencing declines, while SUVs are gaining overall. CX-5 sales were down, with a new generation due to be revealed at the 2016 Los Angeles Auto Show in November. Sales of the Miata dropped 53.5%, a year after the sports car's launch.
Other automakers
Volkswagen Group sales contracted 9.5% in October 2016. Volkswagen brand sales plunged 18.5%. Audi edged its 70th straight month of sales growth with a 0.1% y/y gain while Porsche improved 10.7% y/y. Combined October sales for Hyundai and Genesis (62,505 units, up 4.2%) and affiliate Kia (48,977 units, down 2.1% y/y) delivered a 1.3% gain in October.
Outlook and implications
Although Ford has postponed its October sales results because of a fire at the Ford World Headquarters on Monday (31 October), the industry SAAR pace is expected to increase from the solid 17.7-million-unit reading of last month, breaking the monthly see-saw pattern in place since June. While the November SAAR could slip from the strong pace of the past two months, light-vehicle demand in the second half of 2016 is poised to outpace the first half. Although incentives and fleet sales continue to mount and need to be monitored, both should bolster demand throughout the rest of the year. Our light-vehicle sales projection for full-year 2016 is a volume of 17.4 million units, down slightly from the record 2015 level.
October had 26 selling days, two fewer than the year-earlier period. While a total market volume figure is unavailable without Ford's figures, the loss of two sales days means October's unit volume will be down from the year-ago period for the third month in a row. Monthly volume comparisons will continue to be difficult over the next few months, given the high base effect.
While GM sales were down 1.7% for the month, for the second time this year the automaker improved its market share from the year-earlier period. FCA posted a plunge of 10.5% and Toyota a drop of 8.7%, while Honda slipped 4.2% and Nissan 2.2%. Hyundai-Kia bucked the industry volume trend with sales up 1.3% for the month as the Hyundai brand reported a solid performance from both its passenger car and light truck portfolio.
Given the available incoming data, it is safe to assume that light-truck sales continued to sustain their momentum in October, with sales for the sector estimated to account for more than 61% of the mix.
About this article
The above article is from IHS Automotive Same-Day Analysis of automotive news, events and trends, and is a deliverable of the World Markets Automotive Service. The service averages thirty stories per day and also provides competitor and country intelligence. Get a free trial.