September Delivers Disappointing Sales

Update: Stellantis sales have been added.

September and third quarter sales proved disappointing for automakers after months of steady gains. But electrified vehicles created a bright spot for GM and several other manufacturers — and accounted for nearly half of Toyota’s sales in the U.S.

Sales of almost all vehicles types slowed as manufacturers navigated a downdraft during the September and the overall third quarter, demand slowed by a turbulent mix of politics, weather and concern about interest rates.

Toyota, Honda, Nissan, General Motors, Hyundai and Genesis all reported sales fell or stalled through the third quarter as buyers anticipated a drop in interest rates by the Federal Reserve.

But the Fed’s decision to cut interest rates for the first time in four years could give the market a boost during the final months of 2024.

GM sees bright spots despite declines

While September might have brought disappointing numbers, a number of manufacturers found reason to be upbeat. Surprisingly, electrified vehicles helped keep the mood light.

 

General Motors reported a 2.2% drop in sales during the third quarter, but pointed out several highlights, including a substantial increase in the company’s EV sales and stronger sales of trucks and SUVs.

“GM’s EV portfolio is growing faster than the market because we have an all-electric vehicle for just about everybody, no matter what they like to drive,” said Rory Harvey, GM executive vice president and president of Global Markets.

Hybrids, EVs give Toyota a boost

Toyota Motor North America, the sales leader most of the year, reported U.S. third quarter sales dropped 8% on a volume basis and down 5.6% on a DSR basis. September sales dropped 20.3% on a volume basis and down 9.9% on a daily selling rate basis versus September 2023. September electrified vehicle sales of hybrids, plug-in hybrids, pure electrics and fuel cells were 48.4%of total sales.

“In September, nearly 50% of our total sales volume was an electrified model, an achievement made possible by our outstanding team and dealers,” said Jack Hollis, executive vice president, Sales, TMNA.

The Toyota division for September dropped 21.1% on a volume basis and it was down 10.8% on a DSR basis. For the third quarter, the division’s sales dropped 10.4% on a volume basis and down 8.0 percent on a DSR basis. Year-to-date, Toyota sales rose 5.5% on a volume and DSR basis.

The Lexus division posted a September sales decline of 14.5% on a volume basis and 3.4% on a DSR basis. For the third quarter, however, Lexus sales increased by 8.1% on a volume basis and up 11% on a DSR basis. Year-to-date, the division sold 248,200 vehicles, up 10.7% on a volume and DSR basis.

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Honda, Nissan sales slow

Honda reported a sales decline of 2.2% in September, but said sales increased by 15% in the third quarter. “Our sales momentum has continued through the third quarter with strong demand for Honda and Acura SUVs, and growing sales of electrified models, said Lance Woelfer, vice president of Auto Sales at American Honda Motor Co. Inc.

“Despite some supply issues due to the preparation for EV manufacturing and supply challenges related to the catastrophic Hurricane Helene in the Southeast, we continue to gain sales momentum based on a flexible strategy of offering fuel efficient petrol, hybrid-electric and battery-electric models to meet the needs of our customers,” Woelfer added.

Nissan reported a 2.2% sales decline in the third quarter as Nissan brand sales dropped 1.4% and sales of vehicles of the Infiniti brand fell by 12%. So far this year, Nissan sales are up 1.7% and Infiniti sales have dropped 12.8%.

Hyundai, Genesis sales slide

Hyundai executives said the company’s 9% drop in sales in September had more to do with the calendar than the actual pace of sales. “We set an all-time retail sales record in the third quarter thanks to strong demand for our IONIQ 5 and hybrid models along with the hard work of our retail partners,” said Randy Parker, CEO, Hyundai Motor America.

“A September calendar quirk resulting in fewer selling days and Labor Day falling into the August sales month impacted the year-over-year comparison, but despite that, we still achieved a 36% increase in hybrid sales on the month as consumer demand remains high for hybrids. Our mission is to close the year strong and set another all-time annual sales record for the brand.”

Genesis Motor America reported a 1.5% drop in sales in September 2024 but saw a 4% increase for the third quarter. For the year, Genesis sales are up 2.5%.

Subaru bucks the trend – barely – but

Subaru of America was one of the rare brands reporting an increase in September, albeit just a 0.1% gain. It also reported year-to-date 5.6% increase compared with the same period in 2023.

Jeff Walters, President and Chief Operating Officer, Subaru of America, Inc.: “Subaru’s retailers made a momentous push for a successful end of the summer sales season, and we are confident that they will continue to raise the bar.

More bad news from Stellantis

Stellantis, which was expected to continue reporting bad news, delivered as expected, its third-quarter sales off 19.8%.

Significantly, the Q3 numbers were also down more than 11% from the prior quarter, suggesting that even the automaker’s increasingly lucrative incentives haven’t been able to bring buyers back into showrooms.

And there’s little sign things will get better in the short term. The automaker on Tuesday announced it was temporarily idling production of the little Fiat 500 due to a lack of worldwide demand. Separately, Stellantis revised its financial guidance downward earlier this week, citing rising incentive costs as a key factor.

The automaker is facing the prospect of a new strike by the United Auto Workers Union. And there’ve been growing questions about the leadership of CEO Carlos Tavares who, earlier this year, acknowledged that his own “arrogance” contributed to some of the mistakes the Euro-American automaker is now trying to correct.

Market volatile but growing

Analysts for Cox Automotive say the market for new vehicles remains volatile.

But the market is continuing to grow, and buyers have more power as incentives begin to increase along with inventories of unsold vehicles, which are on the verge of pre-pandemic levels, they added.

Industry observers will be watching closely to see how several factors impact sales during the final quarter of 2024. That includes the hotly contested presidential race, as well as the recent, half-point drop in interest rates, the first cut the Federal Reserve has approved in four years.

But still other factors could come into play. Dockworkers on Tuesday went on strike along the East and Gulf Coasts – which could create havoc for some import brands. And the full impact of Hurricane Helene has yet to be determined. Among other things, the storm has shut down mines in North Carolina which provide about 70% of the high-quality quartz used for the production of semiconductors. If they aren’t reopened soon that could lead to another global chip shortage like the one that resulted in severe automotive production cuts during the pandemic.