General Motors Oct. US sales fall as auto boom slows
General Motors says its U.S. sales fell 1.7 percent last month as all brands but Buick reported declines.
The Detroit automaker, the first to report on Tuesday, says it sold nearly 259,000 cars and trucks in October. But it increased retail sales to individual buyers by 3 percent. GM has been shunning low-profit sales to rental car companies in favor of more lucrative retail sales.
The overall numbers for GM are a sign that auto sales have hit their peak and may even be contracting slightly for the first year since the Great Recession. J.D. Power and LMC Automotive expect total October sales to fall by just over 7 percent, with retail sales to individual customers dropping 8 percent. It would be the fifth month with a year-over-year sales drop this year and a strong sign that the year will fall just short of the 17.5 million sales record set in 2015.
GM reported that it's getting strong prices for its vehicles. Its average sales price of $43,988 was a record for October.
Sales of its top-selling Chevrolet Silverado pickup fell nearly 4 percent but Chevy Tahoe SUV sales rose 81 percent, while GMC Acadia SUV sales were up 24 percent.
Analysts predicted an overall sales decline even though automakers increased average discounts per vehicle by 12 percent above the $3,332 in October of 2015, according to J.D. Power. But the average sales price still was expected to set an October record at $31,383. Prices are rising because more higher-priced trucks and SUVs are being sold. J.D. Power predicted a record retail truck and SUV market share of 62.2 percent.
"The fact that retail sales are beginning to contract despite high incentives and extremely low interest rates and gas prices is a clear indicator that this cycle has reached its peak," said John Humphrey, senior vice president of J.D. Power's global automotive practice, who does not expect a large sales decline for the year.
In previous months, prices of slower-selling cars had fallen due to America's shift toward SUVs and trucks of all sizes. But Barclays analyst Brian Johnson wrote in a note to investors that softer prices are extending into some SUV segments. Barclays will be watching automaker inventories for signs that they are overbuilding, Johnson wrote.
The Edmunds.com auto website has overall sales down at all major automakers, with Volkswagen suffering the worst decline, nearly 18 percent, as it works through an emissions-cheating scandal. Fiat Chrysler sales were expected to fall nearly 11 percent each. Hyundai and Kia, with a decline of 2 percent, would be the least affected by the drop. But GM beat Edmunds' estimate of a 6.3 percent decline for the month.
Ford said Monday its sales figures would be delayed until later in the week due to an electrical fire at its headquarters that stopped dealers from reporting sales to a data center.
Edmunds also expects an industrywide U.S. sales drop of about 7 percent.