Automakers including GM and Fiat Chrysler report third-quarter sales
October 1, 2020
Sales of new vehicles from General Motors Co. and Fiat Chrysler Automobiles were down 10% year-over-year in the period from July through September, as dealers struggle to get new models on their lots after the pandemic shutdown.
Going into the fourth quarter of the year, a major selling time for automakers, industry experts are watching historically low inventory levels closely to see how they affect consumer purchasing decisions.
The available supply of new vehicles has continued to fall since the coronavirus started to hit the U.S. hard in March when inventory levels were above 3.4 million, according to Cox Automotive. Levels were below 2.2 million vehicles in mid-September.
And only 3% of vehicles on lots are from model-year 2021. At this time last year, 25% of vehicles were the new model year, according to Cox.
“It’s not only an issue of do we have enough overall inventory, but do we have the right inventory,” said Charlie Chesbrough, senior economist for Cox, during a Monday call discussing Cox’s auto sales forecast.
For the full year, industry research agency Cox Automotive analysts predict 13.9 million sales after five consecutive years of sales hitting more than 17 million. Of that 13.9 million, 12 million are expected to be retail sales.
GM sold 665,192 vehicles in July, August and September. The automaker said its sales improved each month of the quarter. GM noted that despite tight inventory, large pickup trucks sold well. The Chevrolet Silverado heavy-duty truck’s sales was up 9% and GMC Sierra heavy duty was up 11% compared to a year ago. Overall the Sierra had its best third quarter ever with more than 67,800 sales.
GMC overall was down 5.7% year-over-year, Cadillac was down 17.5%, Chevrolet was down 11.2% and Buick saw a 2.9% drop.
“While the economy has made a substantial rebound in the third quarter, retail auto sales have been even more resilient,” GM Chief Economist Elaine Buckberg said in a statement. “Super low auto loan interest rates have boosted retail auto sales; yet more strength comes from pandemic-induced demand.”
Fiat Chrysler sold 507,351 vehicles during the quarter. Its profit-heavy Jeep and Ram brands were down 9% and 2% respectively. The Ram pickup’s retail sales rose 5%, but overall sales were down 3%. The Jeep Gladiator mid-size truck was the only Jeep to increase in sales, up 37%.
“The results reflect the hard work our dealers have done throughout the third quarter as they worked through the COVID-19 restrictions while still improving our sales over the prior months,” U.S. Head of Sales Jeff Kommor said. “Jeep and Ram are hot and we continue to prioritize deliveries to our dealers who are asking us to ship as many vehicles as we can build.”
Chrysler, boosted by a 32% increase in Pacifica minivan sales, increased sales by 8%. Alfa Romeo vehicles sold at a 17% higher rate. Dodge fell 31%, and Fiat was down 53%.
Automakers, especially at their truck and SUV plants, haven’t stopped pumping out vehicles to keep demand met following an eight-week COVID-19 shutdown, which cost more than 3 million units of production, Chesbrough said.
Going into the fourth quarter there are typically a lot of consumers looking to buy new product, particularly in the luxury market, but “there’s not going to be model year 2021s out there, so are consumers going to hold off in purchasing to wait to get the latest and greatest products, or will they go ahead and buy anyway?” he said. “That’s one of the things that we’re going to be watching for closely.”
At one point this year Ray Laethem Buick GMC in Detroit was down to about 15 GMC models in stock. To put that in perspective, there have been single days when the dealership sold that many GMCs.
“Now, luckily, there is an inflow and the minute that they come in, they’re just going quickly,” said Jeff Laethem, president and general manager for Ray Laethem Motor Village.
The demand comeback during the pandemic “was significantly higher demand than we ever anticipated,” he said. Customers replacing their leases definitely contributed to that, but Laethem said stimulus money likely helped them make new vehicle sales.
“Another reason is because of the shortage in used cars also happened at the same time, those values went up significantly higher than they were before,” he said. “So, people who maybe owed more than the vehicle was worth, now they can get out of that car that they didn’t want to be in anymore because the used car values went up .”
Ford Motor Co. will release its quarterly sales Friday.