auto update

U.S. Auto Sales Show Signs of Recovery in Third Quarter

General Motors Co.’s

U.S. sales fell for the third quarter but showed signs of strengthening as the American auto industry continued to recover from the coronavirus-related lockdowns that brought business to a near standstill this spring.

The U.S. auto industry has bounced back faster than many had expected this summer, due in part to strong demand for trucks and sport-utility vehicles, an increase in urban consumers turning to car ownership and easier credit conditions that make car payments more affordable.

Analysts expected that the selling pace in September would be closer to what it was earlier this year, before the pandemic led to widespread business closures and travel restrictions in March.

GM said Thursday its third-quarter U.S. sales fell nearly 10% from the prior-year period, but the decrease was narrower than the 34% decline posted in the second quarter, when all its North American factories were temporarily idled to protect workers from the spread of the virus. GM has said its production has mostly returned to pre-pandemic levels.

The Detroit auto maker has benefited financially from surging demand for the big pickup trucks that have long been its sweet spot, as well as cost-cutting measures put in place years in advance.

Rival Fiat Chrysler Automobiles NV also reported a 10% drop in third-quarter U.S. sales, but the decline was slimmer than the 39% decrease it posted in the second quarter.

Ford Motor Co.

is expected to release its third-quarter sales Friday, and numbers from

Tesla Inc.

are also expected in the coming days.

Car-shopping website Edmunds.com estimates total U.S. auto industry sales for the third quarter will still be down 11%, but that is an improvement from the nearly 31% plunge that occurred in the second quarter.

Leading the recovery is rising demand from consumers buying cars at dealerships, as opposed to fleet operators and other businesses that purchase vehicles in bulk and are still reeling from the crisis.

A shortage of available vehicles—a hangover from the car factory shutdowns this spring—is helping to drive prices higher as car companies and dealers have pulled back on sales promotions and other discounts.

Car shoppers on average paid an all-time high of $35,655 for a new vehicle in September, up 5.6% from the same month last year, according to J.D. Power.

September sales were boosted in part by the Labor Day holiday weekend, when many dealerships offer discounts to lure customers, but the overall performance points to strong underlying demand for new vehicles, said Thomas King, J.D. Power’s president of data and analytics. “This is despite tight inventory for many of the most popular vehicles.”

South Korea’s

Hyundai Motor Co.

is among several auto makers leading the industry’s comeback. Hyundai, which recently expanded its lineup to include popular full-size SUVs, said its U.S. sales increased 5.4% in September, compared with a year ago, and fell only 1% in the third quarter.

The Japanese car companies, which have a smaller presence in the truck markets that are now booming, have been slower to recuperate. But for some, September was looking up.

Toyota Motor Corp.

said its third-quarter U.S. sales were down nearly 11% over the prior-year period, but it posted a 16% gain in September, with SUVs like the Rav4 and Highlander carrying the company’s performance.

Copyright ©2020 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

Source Article