US auto sales to fall a bit in 3Q, even with September gains
DETROIT (AP) — New vehicle sales in the U.S. are expected to have fallen slightly in the third quarter, even with improvement in September. But there are warning signs that consumers' appetite for expensive new cars, trucks and SUVs may be waning.
Edmunds.com says it expects sales to have fallen just under 1% in the period from July through September when the numbers from automakers are totaled up on Monday. Multiple companies reported sales declines for the quarter, with General Motors as a notable exception.
However, many said sales rose in September as shortages of computer chips and other parts started to ease and auto factories were able to produce more, increasing vehicle supplies. But any monthly gain may be short lived due to high prices and rising interest rates.
"With increasing interest rates, affordability is being tested," Zack Krelle, an industry analyst at TrueCar. "We're seeing consumers faced with the reality that to afford the same vehicle at the same monthly payment as last year, they are forced to increase their down payment, which is creating affordability challenges."
Last month, new auto prices averaged $45,622, the fourth-highest monthly price on record, according to J.D. Power. In addition, auto loan interest rates hit 5.7% between July and September, up from 4.3% a year ago, with terms stretched to average over 70 months, Edmunds said.
Still, General Motors managed to lead the industry for the quarter, selling more than 555,000 vehicles, a 24% increase over last year. The company said it saw improved semiconductor supplies, more stable production and increased inventory on dealer lots during the quarter.
GM said sales of its Bolt electric sedan and utility vehicles more than tripled to almost 15,000 combined, so it will increase production for global distribution to 44,000 this year. The company couldn't sell Bolts much of last year due to a recall for battery fires.
Hyundai also reported a sales increase for the quarter, 3.3%, as did Volkswagen, up 12%. But Toyota sold 7.1% fewer vehicles than in last year's third quarter, and Honda was off nearly 36% from a year ago. Stellantis, formerly Fiat Chrysler, reported a 6% decline, while Nissan was off nearly 23%.
"Although inventory levels should slowly pick up as improvements are made to the microchip supply chain, additional headwinds such as rising interest rates, inflation and looming economic uncertainty threaten to offset much of this progress," said Jessica Caldwell, an executive director for Edmunds.
Most automakers were scheduled to report sales on Monday. Ford is to release its figures on Tuesday.
Tesla reported that its global sales during the quarter rose 35% compared to the second quarter as the company's huge factory in China got past supply chain issues and pandemic restrictions. The electric vehicle and solar panel company said Sunday it sold 343,830 cars and SUVs in the third quarter compared with 254,695 deliveries made from April through June. But its sales fell short of analyst expectations.
Tesla does not break out sales by country or region.