Auto sales should stay steady, moving along at a near-record pace, in October. However, some car companies will suffer a fall-off in sales. First among these is General Motors Co. (NYSE: GM), America’s largest car manufacturer.
Cox Automotive expects sales nationwide to rise 0.2% in October to 1,366,000. The seasonally adjusted annual rate (SAAR) is expected to dip, but not at any alarming pace: “The SAAR in October 2019 is estimated to be 16.9 million, down slightly from last month’s 17.2 million level and down from last year’s 17.5 million pace.” After five years of annual sales at or above 17 million, the industry has had an extraordinary run. At the depth of the recession, in 2009, national car sales fell to a 27-year low of 10.4 million.
In October, GM is expected to post a sales decline of 5.1% to 230,000, compared to October of last year. Cox management says this is for a specific reason. “The bigger threat is fleet activity, which could drop dramatically. Any order fulfillment due during the strike period was likely delayed, thus fleet delivery volume is expected to be lower.” GM is expected to hold 16.8% of the market, the largest share by far.
In a rare occurrence, Toyota Motor Corp. (NYSE: TM) is expected to edge out Ford Motor Co. (NYSE: F) for second place. Toyota’s sales are forecast to be 192,000, or up 0.5% from last year. Ford’s are projected to slip 3.5% to 185,000. Fiat Chrysler Automobiles N.V.’s (NYSE: FCAU) number is anticipated to be just behind that at 182,000, 2.6% higher than last October.
Among the smaller manufacturers, two companies are forecast to post surges in results. American Honda sales are expected to rise 6.4% to 130,000. South Korea’s Hyundai Kia is expected to post a sales gain of 7.0% to 105,000.
If the car industry is a bellwether of how the American economy will do in the near term, it is clearly not signaling any recession. People often buy and hold their cars for several years, and car loans can stretch to five years or longer. In short, what is probably the largest purchase, aside from people’s homes, signals that things are well.
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Source: October 2019 Cox Automotive Industry Insights Forecast. Total includes brands not shown.