U.S. auto sales took a big step back in September, setting the stage for hefty incentive spending by carmakers struggling to clear old models from dealers' inventory.
Toyota Motor Corp. and Honda Motor Co. each suffered double-digit declines that were worse than analysts expected. While a fuller picture will emerge today when General Motors Co. and Ford Motor Co. are due to report, the poor performance suggests that overall deliveries of cars and light trucks could come in worse than the 12% drop anticipated by analysts, based on six estimates.
The slowdown puts auto dealers already struggling with shrinking profit margins in an even more precarious position. With outgoing model-year vehicles clogging their lots, automakers had to pony up record incentives of more than $4,100 a vehicle in the third quarter, according to researchers at J.D. Power and LMC Automotive.
Toyota saw sales plunge 16% in September, with both its namesake and Lexus luxury brands declining by double-digit percentages.
While all car makers are going to struggle with September having been a shorter sales month -- the Labor Day holiday weekend applied to August figures this year -- Toyota can't entirely blame the calendar. Even on a daily selling rate basis, total sales were down 9.2%.
Honda had a rough September after logging its best U.S. sales month ever in August. Deliveries declined 14% last month, a much worse showing than analysts expected.
Nissan's deliveries decreased 18%, though analysts were expecting an even steeper decline of 21%.
Sales of Nissan brand pickups and sport utility vehicles -- which tend to be more lucrative than passenger cars -- dropped 21%, while deliveries for the Infiniti luxury division fell 44%.
Subaru Corp.'s streak of monthly sales increases ended in September, after 93 months -- almost 8 years. Deliveries dropped 9.4%.
Hyundai Motor Co.'s namesake brand weathered the month better than others in the industry, with sales slipping 8.8%.
Information for this article was contributed by Melinda Grenier and David Welch of Bloomberg News.
Business on 10/02/2019