Automakers began reporting September and Q3 sales results today, with more expected to follow tomorrow. Initial reports indicate September sales volume will be down, as our Industry Insights team forecast last week.
With fewer selling days versus September 2018, year-over-year comparisons were expected to show volume declines. The sales pace, however, is forecast to remain strong in September, keeping the industry on track to finish near 17 million in 2019, just slightly above Cox Automotive’s full-year forecast.
In September, average transaction prices (ATP) increased only slightly from year-ago levels. Our Kelley Blue Book team is forecasting the ATP in September to be $37,590, up slightly from September 2018 and above August. You can read the detail here.
Below is commentary on today’s sales results from the Industry Insights team at Cox Automotive. We expect additional sales to be confirmed on Wednesday, Oct. 2 — Fiat Chrysler, Ford and General Motors will release information then. We will update our commentary as required. Listen to a replay of the Cox Automotive Q3 2019 Sales Forecast Call to hear our team’s analysis of industry performance during the last quarter.
From Charlie Chesbrough, senior economist, Cox Automotive
“Based on reports thus far, September sales seem to be coming in near our 16.9 SAAR forecast. All companies are reporting year-over-year declines, and this was expected due to two fewer selling days. When the Detroit companies report tomorrow, we are expecting double-digit volume declines versus year-ago level, in line with our forecast. Overall industry performance in Q3 also appears to be finishing near our forecast and down just slightly from year ago levels.
The third quarter appears to be finishing at a fairly stable pace—4 months in a row of near 17.0 million SAAR after a volatile previous six months. This new trend may be revealing a moderating, stable market, or it may also be the calm before the storm. Retail sales have been declining since 2017, and that trend will continue to weigh on the market as the economy moves through a more turbulent period.”
From Michelle Krebs, executive analyst, Autotrader
“While September sales are being reported today and arriving pretty much as forecast, the real story for the auto industry will be told in the coming weeks as Chevy and GMC dealers runs low on pickup trucks to sell, with the UAW strike against General Motors leading the company to idle the plant in Mexico that makes the Silverado and Sierra.
Dwindling inventory comes at a time of year when pickup truck sales are strong, and at a time when GM is in launch mode with its full array of trucks. This will put the Chevrolet Silverado even further behind the popular Ram in sales. Most importantly, fewer pickup truck sales will impact Q3 and now Q4 profits at GM since pickup trucks account for the bulk of the income.”
From Karl Brauer, executive publisher and analyst at Kelley Blue Book and Autotrader
“There will be more than a few headlines devoted to Subaru’s drop in year-over-year sales—its first decrease in nearly a decade—but the reality is Subaru continues to be one of the hottest auto brands in our market. Its small, well-defined line of products is spot-on for what smart shoppers are looking for; its reputation is among the best in the business; and the new Outback, arguably the brand’s most important product, is the same great package as the old Outback, but better. Sales results come and go, but long term growth is the real prize. And Subaru has certainly won that.”
From Brad Korner, general manager, Cox Automotive Rates and Incentives
“The U.S. auto market continues to be hyper-competitive, which is driving the large volume of unique rates and incentive programs. Incentive volume was high in September, even without a Labor Day weekend. As this is “sell down season” and with the industry working through a lengthy GM strike, the chances of incentive volumes being reduced is very low. I’d full expect 2019 to be a record in terms of incentive program volume.”
Read Brad’s most recent Data Point: Model Year Sell Down is in High Gear
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.