Tags: auto | sales | car | discounts

Dismal US Auto Sales Point to Deep Discounts on the Way

Dismal US Auto Sales Point to Deep Discounts on the Way
(Alexander Raths/Dreamstime)

Tuesday, 01 October 2019 05:01 PM EDT

(Bloomberg) -- U.S. auto sales took a big step back in September, setting the stage for hefty incentive spending by carmakers struggling to clear old models from dealers’ inventory.

Results were disastrous for leading Asian automakers such as Toyota Motor Corp. and Honda Motor Co., which each suffered double-digit declines that were worse than analysts expected. While a fuller picture will emerge Wednesday when General Motors Co. and Ford Motor Co. are due to report, the poor performance suggests that overall deliveries of cars and light trucks could come in worse than the 12% drop anticipated by analysts, based on six estimates.

The severity of the slide stokes fears that a long-anticipated car sales collapse may be arriving. The slowdown puts auto dealers already struggling with shrinking profit margins in an even more precarious position. With outgoing model-year vehicles clogging their lots, automakers had to pony up record incentives of more than $4,100 a vehicle in the third quarter, according to researchers at J.D. Power and LMC Automotive.

Nissan led declines among the major companies reporting Tuesday, as the Japanese carmaker continues to struggle in the post-Carlos Ghosn era.

Here are highlights from the carmakers that have reported results for last month:

Toyota’s Lineup-Wide Tumble

Toyota saw it sales plunge 16% in September, with both its namesake and Lexus luxury brands declining by double-digit percentages. Deliveries fell for almost every model, including its best-selling RAV4 crossover and Camry sedan.

While all carmakers are going to struggle with September having been a shorter sales month -- the Labor Day holiday weekend applied to August figures this year -- Toyota can’t entirely blame the calendar. Even on a daily selling rate basis, total sales were down 9.2%.

Honda’s Turbulent Two Months

Honda had a rough September after logging its best U.S. sales month ever in August. Deliveries declined 14% last month, a much worse showing than analysts expected.

Major models that stumbled in September include the Pilot SUV (-40%), Accord sedan (-20%) and CR-V crossover (-15%).

Nissan Not as Bad as Feared

Nissan’s deliveries decreased 18%, though analysts were expecting an even steeper decline of 21%.

The models that drove the decrease give reason to be downbeat. Sales of Nissan brand pickups and sport utility vehicles -- which tend to be more lucrative than passenger cars -- dropped 21%, while deliveries for the Infiniti luxury division fell 44%.

Subaru’s Incredible Run Ends

It nearly lasted the length of a two-term U.S. presidency, but Subaru Corp.’s streak of monthly sales increases is over.

The Japanese carmaker’s run ended in September after 93 months -- almost 8 years. Deliveries dropped 9.4%, with Tom Doll, chief executive officer of Subaru’s U.S. sales division, citing a rapid sell-down of older-generation Legacy sedans and Outback crossovers.

Palisade Powers Hyundai

Hyundai Motor Co.’s namesake brand may have weathered the month better than others in the industry, with sales slipping 8.8%.

The South Korean company started U.S. deliveries of the Palisade, a three-row flagship SUV, in June. While it’s quickly become one of the carmaker’s better-selling models, Hyundai was unable to measure up against the numbers it posted a year ago. It still expects to have gained market share for the quarter, Randy Parker, Hyundai’s U.S. vice president of sales, said in a statement.

© Copyright 2024 Bloomberg News. All rights reserved.


StreetTalk
U.S. auto sales took a big step back in September, setting the stage for hefty incentive spending by carmakers struggling to clear old models from dealers' inventory.
auto, sales, car, discounts
545
2019-01-01
Tuesday, 01 October 2019 05:01 PM
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