While total vehicle sales were down 10 percent in the third quarter year-over-year for two of the Big Three automakers, numbers are improving since the beginning of the COVID-19 pandemic.
Detroit’s General Motors Co. announced it delivered 665,192 vehicles in the third quarter. Sales improved sequentially each month, while September saw year-over-year sales increases. Total industry seasonally adjusted annual rate was an estimated 15.9 million vehicles for the quarter, up about 4 million units from the previous quarter.
“Our dealers are doing exceptionally well utilizing a combination of customer-facing online technologies – such as Shop. Click. Drive. – and showroom sales to deliver vehicles safely to our customers,” says Kurt McNeil, vice president of U.S. sales operations for GM. “This is contributing to retail share gains while we continue to refill the pipeline. Industry-wide, dealers are selling a high mix of large pickups as the summer comes to an end. Our strong large pickup and all-new full-size SUV lineups from Chevrolet and GMC are selling extremely fast.”
GM’s Chevrolet Blazer was up 45 percent, its best quarter ever, and the Cadillac XT6 was also up 45 percent compared to the third quarter of last year. Buick’s compact SUV, the Envision, was up 44 percent. The Cadillac CT4 and CT5 sedans continue to grow share, and the CT4’s average transaction price outperformed its segment average, according to J.D. Power.
All-new crossovers – the Chevrolet Trailblazer and Buick Encore GX – continue to gain momentum. Compared to the second quarter, Trailblazer sales increased 54 percent, and Encore GX sales increased 73 percent. The two vehicles captured a combined 11 percent of retail market share in the third quarter for the small SUV segment, according to J.D. Power.
The company’s large pickup trucks sold well, especially heavy-duty pickups. The Chevrolet Silverado HD was up 9 percent, and GMC Sierra HD was up 11 percent compared to a year ago. Total Sierra sales posted its best third quarter ever. Year-to-date, GM combined light- and heavy-duty pickups gained 1.6 percentage points in retail market share to capture 37.5 percent of the segment, according to J.D. Power.
In response to demand, large pickup and full-size SUV plants are all operating on three shifts and at maximum overtime with COVID-19 protocols in place.
“While the economy has made a substantial rebound in the third quarter, retail auto sales have been even more resilient,” says Elaine Buckberg, chief economist for GM. “Super low auto loan interest rates have boosted retail auto sales; yet more strength comes from pandemic-induced demand.”
Pandemic-induced auto demand drivers include the fact that consumers see private vehicles as a safe space for travel, as indicated by surveys from McKinsey and Co. and Ipsos. The rebound in housing permits is a positive signal for overall auto demand. Higher home construction activity and strong demand for boats and RVs are favorable for heavy-duty pickup sales.
GM’s growing captive finance company generated nearly 2 million leads over the past 12 months, helping drive more than 400,000 vehicle sales, 73 percent of which were financed by GM Financial. The company’s penetration of total U.S. GM retail sales was 53 percent in the second quarter, driven by strong dealer engagement.
Volume for GM Financial’s online credit application was up 27 percent year-over-year, with more customers shopping online due to the pandemic.
Auburn Hills-based FCA US sold 507,351 vehicles in the third quarter. Strong retail sales offset the ongoing drop in fleet purchases.
Sales for Ram brand pickup trucks rose 15 percent for the quarter. Jeep also posted a solid quarter, led in large part by the continued success of the Jeep Gladiator and Jeep Wrangler. Total Gladiator sales rose 37 percent year-over-year to 22,163 vehicles.
Third-quarter sales finished 38 percent higher than the second quarter results, with FCA selling 140,265 more vehicles.
“The results reflect the hard work our dealers have done throughout the third quarter as they worked through the COVID-19 restrictions while still improving our sales over the prior months,” says Jeff Kommor, U.S. head of sales. “Jeep and Ram are hot, and we continue to prioritize deliveries to our dealers who are asking us to ship as many vehicles as we can build.”
FCA says its reveals of the Ram TRX, Jeep Grand Wagoneer Concept, and Jeep Wrangler 4xe plug-in hybrid have stirred consumer buzz. Production of the TRX is scheduled to begin in the fourth quarter, while the Grand Wagoneer Concept marks the first step in the rebirth of Wagoneer as Jeep works to expand into new segments.
The Wrangler 4xe has 375 horsepower and delivers up to 25 miles of pure electric operation for daily commutes. It is expected to be available by the end of the year.
“We are optimistic about the U.S. market and expect sales to remain strong as we close out 2020,” Kommor says.
Ford Motor Co. in Dearborn will release its most recent financial report in the coming days.