Updated 9:45 a.m.
Cleveland, Ohio – July and August were rough for the U.S. auto industry, but things markedly perked up in September with General Motors and Honda both reporting sales gains for the first time since COVID-19 shut down the national economy and made it difficult for buyers to get into showrooms.
GM economists estimate the seasonally adjusted annual rate (SAAR) for Q3 was 15.9 million vehicles – a massive improvement from the 11.9 million posted in Q2 as much of the country was locked down, and only about 1 million vehicles away from expectations analysts had heading into 2020.
“While the economy has made a substantial rebound in Q3, retail auto sales have been even more resilient,” said GM Chief Economist Elaine Buckberg. “Super low auto loan interest rates have boosted retail auto sales; yet more strength comes from pandemic-induced demand.”
Surveys show that drivers see their vehicles as safe spaces, safer than ride sharing apps. Consumers who kept their jobs haven’t been eating out or taking vacations, so many have saved enough money to consider new vehicles. And the housing and construction markets have improved, creating more demand for pickups and work vehicles.
[Update] Ford Motor Co. reported numbers Friday morning, and it's Q3 recovery was the strongest of the major automakers. During the July-through-September period, Ford sales were down less than 5%, and pickup sales increased, jumping 17% in September alone. In Q2, Ford's numbers were worse than its peers as the automaker's sales tumbled 33%.
"We had our best third quarter of pickup truck sales since 2005," said Mark LaNever, Ford's vice president of U.S. sales and marketing. He noted that dealers sold 76,000 F-Series pickups in September.
For many automakers, the turnaround has been dramatic. Honda sold nearly 8,000 more CR-V crossovers in September than it did a year ago, a nearly 50% increase. The redesigned CR-V had been posting sales gains earlier in the year, so the September figures are a return to form.
Fiat Chrysler Automobiles’ (FCA’s) Jeep’s Gladiator pickup posted a 37% increase in the quarter, though it wasn’t enough to outweigh losses elsewhere.
GM and FCA posted 10% sales declines for Q3, traditionally a very bad number. But in Q2, GM was down 17% and FCA was down 20%, so the automakers roughly halved their losses. Volkswagen moved from a nearly 18% decline in Q2 to about an 8% drop in Q3.
Honda’s 10% Q3 decline was a massive improvement from the nearly 30% drop it experienced in Q2.
“September marks a high-water mark for Honda sales this year with double-digit gains and our first month in positive territory since the pandemic began,” said Dave Gardner, executive vice president of National Operations at American Honda. The automaker’s Acura luxury division was even in the black during the quarter, posting a 1.6% sales gain.
Hyundai’s sales were down about 1% for the quarter, and sales were particularly strong in September with Palisade large SUV sales more than doubling from a year ago.
An outlier was Nissan, a company that has been struggling for more than a year with a lineup too heavy on cars (SUVs continue to gain share), and an aging lineup of crossovers and trucks. Nissan sales were down 32% in Q3, though even that decline was an improvement from Q2’s 49.5% drop.
At FCA, U.S. Head of Sales Jeff Kommor said automakers are expecting more improvement in the final quarter of the year as the economy continues to reopen, allowing consumers to spend some money.
“We are optimistic about the U.S. market and expect sales to remain strong as we close out 2020,” Kommor said.
About the author: Robert Schoenberger is the editor of Today's Motor Vehicles and Today's eMobility and a contributor to Today's Medical Developments and Aerospace Manufacturing and Design. He has written about the automotive industry for more than 19 years at The Plain Dealer in Cleveland, Ohio; The Courier-Journal in Louisville, Kentucky; and The Clarion-Ledger in Jackson, Mississippi.
October 05, 2020 at 06:05PM
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