October U.S. auto sales were forecast by Cox Automotive to be up year over year, driven mostly by ongoing consumer demand for pickup trucks and SUVs. Initial results on Tuesday, Nov. 3, indicate that sales would close near forecast and, importantly, year-over-year sales growth, albeit small, is keeping the industry’s recovery on course. Year-to-date sales are now down less than 10% versus 2019, a reasonable figure considering the collapse in the spring.
Continued consumer demand for expensive new vehicles has surprised more than a few of us, including Cox Automotive Senior Director of New Car Solutions Brian Finkelmeyer. “One of the most remarkable stories in the car business this year has been the extent to which new-vehicle sales have rebounded from the depths of April and May,” writes Finkelmeyer in a Commentary & Voices article posted recently in the Cox Automotive Newsroom.
October sales volume is buoyed by an extra selling day and solid results from the likes of Toyota and Hyundai. Subaru posted an all-time October sales record. Cox Automotive Senior Economist Charlie Chesbrough added, “Strong sales of higher-priced products appear to continue in October. Some luxury brands and pickups did especially well, which indicates higher-income buyers remain in market. However, weakness of lower-priced segments like compact car shows these buyers, generally with lower incomes, have been hit hard by the pandemic recession. All of which suggests the vehicle market is an example of the K-shaped economic recovery – higher incomes do well while lower incomes do not.”
Automakers who did experience sales dips in October were likely victims of shifting consumer tastes, as car segments continue to underperform the market. Kelley Blue Book Senior Analyst Eric Ibara notes, “Ford is a good example of how the U.S. market has shifted. We’re estimating that they saw a year-over-year sales decline in October, but the drop was almost driven entirely by their discontinued models – Fusion, Fiesta, Taurus and Flex. The good news for Ford is that their highly profitable products are holding up – Explorer, Expedition, the F-Series. The Lincoln brand is showing strength as well. As we end 2020, we are beginning to see a transformed Ford Motor Company – a truck and SUV company, a profitable combination in today’s market.”
For more information and data on October new- and used-vehicle sales performance, check back on the Cox Automotive Newsroom.
If you would like to speak with one of the expert analysts from Autotrader, Kelley Blue Book or any member of the Cox Automotive Industry Insights team, please contact us.