By Nora Naughton
This article is being republished as part of our daily
reproduction of WSJ.com articles that also appeared in the U.S.
print edition of The Wall Street Journal (October 3, 2019).
General Motors Co.'s U.S. auto sales climbed 6.3% in the third
quarter on higher pickup-truck sales and strong demand for its
sport-utility vehicles, signaling a United Auto Workers strike at
its U.S. factories has so far had little effect on showroom
traffic.
GM's quarterly sales gains contrast with flat results at Fiat
Chrysler Automobiles NV for the same period and a 5.1% decline
reported by Ford Motor Co. for the third quarter.
Shares of GM fell 4% and Ford's shares declined 3.3% Wednesday,
worse than the decline in the overall market, amid growing concerns
of an economic slowdown and signs of further weakening in the
global car market. Fiat Chrysler shares dropped 1.9%, in line with
the broader market.
Foreign auto makers on Tuesday reported worse-than-expected U.S.
sales for September, with many of the Japanese auto makers posting
declines of more than 10%.
The strike at GM, now in its third week, has brought the
company's more than 30 U.S. factories to a standstill, denting
third-quarter profits and limiting supplies to dealerships.
Still, new-vehicle buyers continued to snap up GM models, with
pickup-truck sales at Chevrolet up 18% and up nearly 40% at GMC in
the third quarter. The Detroit car company is benefiting from new,
redesigned pickup trucks that started hitting dealer lots in larger
supplies in the third quarter. Sales of large SUVs also increased,
with the Chevrolet Traverse up about 25% and GMC's Acadia up
50%.
Stock levels at GM dealerships remain relatively healthy despite
the work stoppage, with retailers carrying about 760,000 vehicles
in inventory. Morgan Stanley estimates GM dealers have enough stock
to last 81 days without replacement inventory, down from 84 a year
earlier.
"We've got inventory to take advantage should GM run into some
availability problems," said Mark LaNeve, Ford's U.S. sales
chief.
GM's strength comes as the U.S. car market continues to soften
overall, following a period of historically strong sales bolstered
by a robust U.S. economy and low unemployment.
GM's U.S. sales for the first nine months slipped less than 1%,
while Ford's sales fell 3.8% and Fiat Chrysler reported a 1%
decline.
Among the Japanese car companies, Toyota Motor Corp. reported a
2.5% drop in U.S. sales for the first three quarters, while Honda
Motor Co.'s U.S. sales were off less than 1%. Nissan Motor Co.'s
U.S. sales dropped 7.1% in the first nine months compared with the
same year-ago period.
Overall, U.S. auto-industry sales were down 1.4% in the
January-to-September period, according to Cox Automotive.
U.S. auto-industry sales are expected to decline slightly this
year, with analysts predicting they could fall short of 17 million,
marking the first time they've dropped below that level in five
years.
Rising car prices, which have helped boost auto-company and
dealer profits in recent years, continue to dent demand for new
vehicles as car buyers more often opt for cheaper, used models.
That's prompted more auto makers to deepen discounts on new
models, especially those that have been sitting on the new-car lot
for some time. Dealers have also struggled with bloated inventory
levels this year as they've been slow to clear out older model-year
stock.
Car-company spending on discounts and other sales promotions
increased 6% in the third quarter as retailers pushed to sell down
old inventory. Still, the average price paid for a new vehicle hit
a quarterly record of $33,320 in the same period, according to J.D.
Power, as buyers continued to gravitate to pricier pickup trucks
and SUVs, moving away from lower-priced sedans.
While GM's sales have yet to be significantly affected by the
strike, the auto maker's pickup production was completely suspended
this week when it idled its truck plant in Mexico because of a lack
of parts. The company's other two truck plants in the U.S. have
already been temporarily shut down amid the walkout.
"The real story for the auto industry will be told in the coming
weeks as Chevy and GMC dealers run low on pickup trucks to sell,"
said Michelle Krebs, an analyst with Cox Automotive.
While Mr. LaNeve said he isn't anticipating a UAW strike at
Ford's plants, the company has a stockpile of new models, including
larger trucks, that would help sustain dealers if a work stoppage
were to occur.
At the beginning of the fourth quarter, the company had enough
new-vehicle stock to last it more than two months if factory output
were halted immediately, he added. The UAW is working to reach a
new labor deal with GM first before turning its full attention to
contract talks with Ford and Fiat Chrysler.
Ford attributed its softer sales results for the third quarter
to its shift away from sedans and small cars, and delays rolling
out a new Explorer SUV. Ford's passenger-car sales fell 24.5% as
the company continued to sell down discontinued models. Its SUV
sales declined 10.5% in the third quarter.
Fiat Chrysler's Ram brand continued to drive the
Italian-American auto maker's U.S. sales results in the third
quarter, offsetting declines among its other brands. Sales at its
top-selling Jeep brand slipped 2% and the Chrysler division sank
23% on sharply lower sales of the Pacifica minivan.
Toyota, Honda and Nissan this week posted significant sales
declines in September due in large part the fact that Labor Day
weekend sales were included in the August tally. The holiday
weekend is a major sales drive for car companies with many offering
steep discounts to clear out old, unsold car inventory to make room
for newer models.
Toyota's sales fell 16.5% in September, while Honda reported a
14% drop and Nissan was down 17% last month.
GM, Ford and Fiat Chrysler no longer report monthly sales,
releasing results only on a quarterly basis.
--Mike Colias contributed to this article.
Corrections & Amplifications Ford's sales fell 3.8% for the
first nine months. An earlier version of this article incorrectly
gave the decline as 4.1%. (Oct. 2, 2019)
(END) Dow Jones Newswires
October 03, 2019 02:47 ET (06:47 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
Ford Motor (NYSE:F)
Historical Stock Chart
From Aug 2024 to Sep 2024
Ford Motor (NYSE:F)
Historical Stock Chart
From Sep 2023 to Sep 2024