If anybody needed more proof that the new-vehicle cycle was peaking in the U.S., October's results should confirm it. Despite this year's best seasonally adjusted annual sales rate (SAAR) of 17.98 million in October, that number still failed to reach last year's 18.2 million – which was also the highest figure recorded during this cycle. Setting the SAAR aside, sales slid 5.9% industrywide, albeit with two fewer selling days last month compared with the prior year.
So Detroit automakers, despite America's high demand for SUVs and full-size trucks, had a pretty rough month. Here's the good, the bad, and the ugly from General Motors (NYSE:GM), Ford Motor Company (NYSE:F) and Fiat Chrysler Automobiles (NYSE:FCAU).
General Motors stood out
At first glance, General Motors' overall sales decline of 1.7% to 258,626 units doesn't seem great, but it's much better than it appears. Despite having two fewer selling days, GM grew its retail sales 2.5% from last year's October. The total decline was mostly due to its focus on reducing fleet sales; in fact, GM's fleet sales to daily rentals, the least desirable of fleet channels, were down 19% in October.
Thanks to GM's success with retail sales during a month when most of its competitors struggled mightily, its retail market share jumped 160 basis points to 18.1%, the largest of any competitor. If you're keeping track, that marks the 16th month of the past 19 when GM gained retail market share.
One bright spot was General Motors' Buick brand. Buick not only posted a retail sales increase of 7% last month, its best October since 2003, but it was also the first American auto brand to crack the top three in Consumer Reports' Car Reliability Survey rankings since the survey began in the early 1980s.
In addition to its solid retail sales gains, GM's pricing remained strong in October. GM's average transaction prices (ATPs), which are retail prices after sales incentives, reached $36,155 last month. That was $4,650 above the industry average and even $1,000 above GM's own performance during last year's October.
In my opinion, General Motors not only outperformed its fellow Detroit automakers in October; it outperformed every automaker.
Up in flames
Ford investors had to wait a day to sift through the automaker's October data, as an HQ fire prevented the company from tallying all of its results on the intended day. But when the results did come out, it was certainly underwhelming for investors hoping Ford could shake off a tough couple of months.
In total, Ford's sales in the U.S. declined 11.7% to 188,813 units in October and remain 0.4% lower for the full year. The automaker's retail sales weren't much of an improvement, unlike its rival GM, recording a 7% decline for October. Fleet sales were also 24% lower than year-ago levels.
As for Ford's results per segment, the passenger-car segment will make you cringe. Ford's two best-selling cars in the U.S., the Fusion and Focus, posted significant declines of 21% and 43%, respectively. That drove the entire Ford car segment nearly 31% lower for October. Even Ford's SUV segment couldn't escape, no pun intended, with a sales gain. Ford's SUV sales were down 9.3% in October, driven by 14.1% and 4.9% declines from the Explorer and Escape, respectively.
If you need a pick-me-up while looking at Ford's results, glance at the company's pricing. The F-Series increased its retail sales by 2%, and high-end trims such as the Lariat, King Ranch, and Platinum generated 75% of retail sales. High-end truck sales helped boost Ford's ATPs $1,600 higher compared with the prior year, far ahead of the $600 industry average.
While Ford had some bright spots with its pricing and retail truck sales, it can't offset the fact that the automaker's market share last month was the lowest it's been since September 2008. We'll see how Ford plans to revive sales, or rather cut supply to match demand and hold pricing, over the next few months.
FCA's Jeep falters again
Ford wasn't the only Detroit automaker struggling last month. Fiat Chrysler posted a 10% sales decline to 176,609 units in October, compared with the prior year. For years, investors became used to seeing FCA post strong double-digit sales gains, driven by its red-hot Jeep brand. That's changed over the past couple of months, with Jeep posting another rare sales decline.
More specifically, Jeep sales were down 7% last month. Much of that decline was due to the Cherokee, Jeep's best-selling vehicle year to date, which was down 23% compared with the prior year's October. In terms of FCA's brands, Ram was the only bright spot. The Ram pickup managed to post a 7% sales gain, which helped haul the entire Ram brand 12% higher over last year's October.
The rest of FCA's brands had an absolutely horrid month. Chrysler's sales were down 45%, and Fiat posted a 24% decline. Meanwhile, Dodge's 16% decline was bad, but then for only the Journey and Viper to manage a gain out of the eight vehicles made it seem worse, especially considering the Viper outsold its year-ago comparison by one single vehicle.
It was a pretty tough month for Detroit automakers, but this will be more of the norm going forward. Expect tough year-over-year comparisons as the market plateaus. Investors should pay more attention to how high incentives rise and if average transaction price gains offset the difference. If automakers can maintain incentive levels and pricing, the current environment of low interest rates and cheap fuel should enable automakers to continue cranking out profits even as the market stalls.