Ford, Japan 3 sales drop on weak car volume
UPDATED: 12/3/2018 10:52 am ET
Ford Motor Co., Toyota Motor Corp., Nissan Motor Co. and American Honda Motor Co. recorded lower U.S. sales in November, reflecting sharp declines in car deliveries. FCA US sales rose 17 percent behind a 6 percent gain in retail volume and stronger fleet shipments.
Ford Motor Co.’s U.S. sales fell 7.1 percent in November as another weak month for car demand combined with lower truck deliveries. It was the third straight monthly decline for the automaker as sales dropped 7.6 percent at the Ford division. Volume rose 3.3 percent at Lincoln.
Overall, Ford said truck demand slipped 2.3 percent while SUV and utility sales dropped 4.9 percent. But car deliveries skidded 20 percent and are now down 18 percent for the year.
Toyota Motor Corp. sales slipped 0.6 percent behind a 17 percent decline in car deliveries that failed to offset an 11 percent gain in light-truck demand. Sales slipped 0.3 percent at the Toyota division and 2.5 percent at Lexus.
Demand for the Toyota Camry plunged 30 percent and is now down 8.6 percent for the year.
November marked the ninth straight month U.S. sales at FCA US rose year over year. Volume advanced 12 percent at Jeep, 44 percent at Ram, 15 percent at Dodge and 36 percent at Alfa Romeo. But volume skidded 21 percent at the Chrysler brand and 24 percent at Fiat.
FCA said fleet shipments hit 44,606 last month, or 25 percent of total deliveries.
Nissan Motor Co. sales dropped 19 percent last month with volume down 22 percent at the Nissan brand but rising 8.1 percent at Infiniti. Nissans car deliveries slumped 33 percent and light-truck sales dropped 8.4 percent as the company continues to dial back on incentives and fleet business.
At American Honda, volume dropped 9.5 percent in November, dragged down by a sharp decline in demand for the Civic and other cars.
An 11 percent increase in Acura sales wasn’t enough to overcome an 12 percent decline at the Honda brand. American Honda sales are now down 2.8 percent for the year.
The November totals included a 30 percent plunge in Civic sales. Its bigger passenger-car sibling, the Accord, managed a 1.6 percent increase for the month but is down 13 percent for the year. Overall, American Hondas car sales dropped 13 percent and light truck deliveries fell 7 percent last month.
The tally for U.S. light-vehicle sales in November is expected to be down about 2 percent after other automakers release results later today.
It would be the first year-over-year November decline since 2009 and another sign of a weakening market, even amid a wave of year-end deals and sales promotions.
“November’s sales slowdown signifies a new normal that we can expect through at least the end of 2018, and likely into 2019,” said Jeremy Acevedo, manager of industry analysis at Edmunds. “Although sales remain at a healthy level, factors such as increasing market saturation, rising transaction prices and elevated interest rates continue to create headwinds for the industry overall.”
U.S. sales were up 0.5 percent through October, helped by higher fleet shipments that have offset lower demand from individual customers.
While falling gasoline prices and healthy payrolls have helped sustain economic growth, rising interest rates, volatile equity markets and trade fears have undermined auto sales, analysts say.
The seasonally adjusted, annualized sales rate for November is expected to come in at 17.3 million, based on analysts surveyed by Bloomberg. That would be down from November 2017’s 17.65 million rate and October’s 17.59 million pace.
Still, annual U.S. sales are on track to come in above 17 million for a fourth straight year, extending a record streak.
Outlook by automaker
Among major automakers, ahead of today’s reports, analysts polled by Bloomberg expected sales last month to rise 15 percent at FCA US and 0.1 percent at Toyota but drop 3.6 percent at General Motors, 8.7 percent at Ford, 4.9 percent at Honda Motor Co., 15 percent at Nissan Motor Co., 0.2 percent at Hyundai-Kia and 3.5 percent at Volkswagen-Audi.
J.D. Power estimates the average incentive for a new car and light truck was $3,783 in the first several weeks of November, down from $4,068 in November 2017. ALG estimates average incentives slipped to $3,672 per vehicle last month from $3,803 in November 2017, with the Detroit 3, Nissan and Volkswagen Group among the highest spenders. (See chart below.)
• There were 25 selling days last month, the same as in November 2017.
• J.D. Power estimates light trucks accounted for 71.2 percent of new-vehicle retail sales through Nov. 18 — the highest level ever for the industry — and the second consecutive month above 70 percent.
• The average transaction price for a new light vehicle was $34,438 in November, up 1.7 percent from a year earlier, ALG says.
• Days to turn, the average number of days a new vehicle sits on a dealer lot before being sold to a retail customer, was 70 days through Nov. 11, down four days from Nov. 2017, J.D. Power says.
• Fleet deliveries are expected to total 263,300 in November, up 3.5 percent from November 2017, J.D. Power estimates. And fleet volume is expected to account for 19 percent of total light-vehicle sales, up from 18 percent in Nov. 2017.
• The annual percentage rate on new financed vehicles averaged 6.0 percent in November, compared to 6.2 percent in October, Edmunds said Monday, attributing the month-over-month dip to a bump in zero percent finance deals from automakers compared to November 2017.
“The industry had a steady, consistent performance [in November] much in the same range it has all year.”
-- Mark LaNeve, Fords vice president of U.S. marketing, sales and service
"Consumers continue to pay near record amounts for new vehicles, despite the headwinds of stock market volatility and rising interest rates. 2019 was expected to be a year of transition with regards to sales, average transaction prices and incentive spending, instead weve seen automakers making all the right moves to sustain transaction prices and decrease incentives while maintaining a robust 17 million annual sales rate."
-- Eric Lyman, ALG’s chief industry analyst