US car sales fall slightly in 3Q, even with gains in September

US car sales fall slightly in 3Q, even with gains in September

DETROIT (AP) — New car sales in the US fell slightly in the third quarter, although some automakers reported improvement in September. But there are warning signs that consumers’ appetites for expensive new cars, trucks and SUVs may be diminishing. said Monday that sales fell 0.9% from July to September, with most automakers reporting declines. General Motors was a notable exception, registering a large increase.

Many companies, including GM, said sales surged in September as shortages of computer chips and other parts began to ease and auto plants were able to produce more, increasing auto inventories. But analysts said any monthly gains could be short-lived due to high prices and rising interest rates.

“With rising interest rates, affordability is being tested,” Zack Krelle, an industry analyst at TrueCar. “We see that consumers are faced with the reality that if they want to pay for the same vehicle at the same monthly payment as last year, they will be forced to increase their down payment, which creates an affordability problem.”

Last month, new car prices averaged $45,622, the fourth-highest monthly price ever, according to JD Power. In addition, average interest rates for auto loans were 5.7% between July and September, up from 4.3% a year ago, with maturities averaging over 70 months, Edmunds said.

Still, General Motors managed to lead the industry this quarter, with more than 555,000 vehicles, up 24% from last year. The company said it saw improved semiconductor inventories, more stable production and increased inventory on dealer lots. The number of GM vehicles in transit or on dealer lots rose to 359,292 last quarter, more than 111,000 from the second quarter, GM said.

The automaker said sales of its Bolt electric car and commercial vehicles have more than tripled to nearly 15,000 combined, so it will increase production for worldwide distribution to 44,000 this year. The company was unable to sell Bolts much from last year due to a battery fire recall.

Honda, which was hit hard in the summer when parts shortages reduced deliveries to dealers, said September was its best sales month since May as it overcame transportation problems. Still, September sales were down 17% from a year ago and 36% for the quarter.

Mamadou Diallo, vice president of sales, said in a statement that Honda expects higher production in the fourth quarter as it introduces new models. “The pipeline is getting stronger,” he says.

Toyota sold 7.1% fewer vehicles than in the third quarter of last year, and Stellantis, formerly Fiat Chrysler, reported a 6% decline, while Nissan lost nearly 23%. Hyundai reported revenue increase for the quarter, 3.3%, as did Volkswagen, up 12%.

Sales have fallen for most of the year, but automakers are getting sticker prices or higher for scarce vehicles from consumers who wanted or needed new wheels. As a result, automakers and dealers made huge profits.

Ivan Drury, director of Insights for, said there is a huge amount of “deferred demand” for new vehicles this year. But he warned that macroeconomic trends will begin to deteriorate as inflation stretches monthly budgets and the Federal Reserve raises interest rates to counter it. Drury says home prices are expected to fall soon, causing personal wealth to decline as auto loan interest rates increase monthly payments.

“I think it’s finally getting worse, the discomfort with the interest rates, with inflation,” Drury said.

Even with high trade-in values, the rates make monthly payments prohibitively high, he said, adding that if unemployment starts to rise, car sales could start to fall.

“The potential pool of consumers who have cash or don’t care what they pay, that pool will shrink quickly once these other factors take effect,” he said.

During the summer, people paid an average of $700 more than the sticker price to buy vehicles, Drury said. But that has recently fallen to the upper range of $200, a sign of the market cooling, he said.

Most automakers reported sales on Monday. Ford will announce its figures on Tuesday. Edmunds’ figures include estimates for both companies.

Telsa reported that global sales rose 35% during the quarter compared to the second quarter as the company’s massive factory in China moved past supply chain issues and pandemic restrictions. The electric vehicle and solar panel company said Sunday it sold 343,830 cars and SUVs in the third quarter, compared with 254,695 deliveries from April to June. But sales fell short of analysts’ expectations.

Tesla does not divide sales by country or region.

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