The U.S. auto industry is experiencing a slowdown in retail demand for new vehicles, primarily attributed to high interest rates and elevated prices. Despite some rebounding in inventories and incentives, U.S. light-vehicle sales in October only increased by 1.8 percent to 1.2 million, according to preliminary estimates by GlobalData. The seasonally adjusted annual rate of sales also dipped to 15.66 million vehicles, down from 15.73 million in September and the 2023 peak of 16.22 million recorded in June.
Notably, several major automotive brands, including Toyota, Kia, and Hyundai, saw the smallest gains of the year in October, with higher fleet shipments at Hyundai offsetting a 7 percent drop in retail deliveries. Ford Motor Co. experienced a 5.2 percent decline in sales, ending a streak of 10 consecutive monthly gains, largely due to the six-week strike by the United Auto Workers (UAW) against the Detroit 3 automakers. Mazda also saw a decline in sales, and Cox Automotive reported a drop in fleet shipments, likely as a result of the UAW strike.
Also, don’t forget that you can get discounted new car pricing with a free quote through qualified local dealer partners.
The industry had expected a 3 to 4 percent growth in U.S. light-vehicle sales in October, as per projections by J.D. Power, GlobalData, S&P Global Mobility, and Cox Automotive. However, the combined sales of the seven automakers reporting monthly results only rose by 5.5 percent. This is in stark contrast to the 17 percent growth in the third quarter and 14 percent growth in the first nine months of the year.
GlobalData’s David Oakley highlighted that factors such as the restart of student loan repayments, high interest rates, inflation, and lingering supply chain issues have impacted the market. However, he also expressed optimism that the end of the UAW strikes could lead to a robust final two months of 2023 if automakers offer attractive incentives to entice consumers.
The UAW strike played a significant role in the industry’s performance, and its impact may continue to be visible in November. The industry faces various challenges, including high interest rates, pricing concerns, consumer pessimism, geopolitical factors, and the potential of a U.S. government shutdown. Cox Automotive’s Charles Chesbrough anticipates a further cooling of the seasonally adjusted annual rate of sales as the year draws to a close.
Specific automakers had mixed results in October. Ford division sales were down over 5 percent, with significant drops in sales for models like Ranger and Bronco. Toyota’s sales were also mixed due to ongoing inventory challenges. However, Toyota outsold General Motors in October for the first time since July 2022.
Honda reported a 33 percent sales increase in October, driven by strong sales of core models. The company expects U.S. industry sales to reach 15.7 million vehicles in 2023 and is focusing on retaining customer loyalty through incentives.
Hyundai saw a slight rise in October, with several nameplates posting double-digit gains, offsetting declines in other models. The company expressed confidence in its performance for the remainder of 2023.
Kia achieved an October record with a 1.5 percent increase in deliveries, despite drops in sales for some core models. Kia’s electric vehicle sales, on the other hand, increased by 83 percent, and the automaker is poised to achieve record-breaking annual sales for 2023.
In a competitive industry, these trends reflect the complex challenges and opportunities that automakers are facing as they navigate a dynamic economic and consumer landscape in the U.S. auto market.
