Cars and Drivers

Hurricane Harvey to Hurt Car Sales, but Can't Stop GM's Progress

Douglas A. McIntyre

Published: August 31, 2017 7:00 am

Last Updated: January 12, 2020 8:37 am

Analysts are almost universal in their opinion that Hurricane Harvey will cut into U.S. car sales in August. However, the forecast that General Motors Co. (NYSE: GM) will have an extremely good month has stayed in place. Among the large car companies, it is the only one likely to increase sales, according to recent research.

Kelley Blue Book has released its new forecast for August sales. Its analysts expect total U.S. light vehicle sales to drop 0.7% to 1.5 million for the month. But GM is expected to post a 4.1% gain year over year to 267,000. That will lift its market share from 17.0% to 17.8%, from August of last year to August 2017.

The only other car company expected to post a gain is Toyota Motor Corp. (NYSE: TM), which Kelley Blue Book expects will have a unit sales increase of 4.2% to 222,000. This means that it will pass Ford Motor Co. (NYSE: F) as the number two seller.

As each month passes and it becomes clear that car sales in the United States have peaked, the battle among the large manufacturers becomes one that is exclusively for market share, as discounts undermine profits substantially. GM and Toyota have a leg up in August.

The companies that will suffer this month have become regular losers. Ford’s sales are expected to fall 5.3% to 202,000, according to the Kelley Blue Book forecast. The turnaround of Ford looks farther and farther away. Fiat Chrysler Automobiles N.V. (NYSE: FCAU), the most crippled of the manufacturers, is forecast to post a drop of 5.5% to 186,000. Many of its primary divisions are in trouble. Chrysler and Dodge passenger car sales are in trouble. The once-hot Jeep division no longer rings up strong monthly gains. All the Fiat Chrysler models rank low in many consumer quality studies, which may help prolong the slump.

GM may be the breakout success among the largest companies, if it can carry its momentum into the critical fall selling season and on through the holidays. It has been a long time since it had 18% of the U.S. market. That may happen again soon.