For automakers, October 2022 was a mixed bag of successes and some losses. However, there’s a lot to be optimistic about for the automotive industry. Forecasts and analysis from Cox Automotive and TrueCar revealed that auto sales look as if they might be rebounding and holding their own in comparison to last year’s results.
Here are some takeaways from October’s auto sales performance:
Overall positive sales trends
According to Cox Automotive, overall total industry sales volume looks like it will rise above their original forecasts to show a 4.4% year-over-year gain. It will likely surpass the 1.1 million expected units that Cox initially projected. TrueCar shows even more optimistic news as they estimate that total vehicle sales will increase by 15% compared to October 2021, to 1,165,658 units sold. This would take the monthly seasonally adjusted rate (SAAR) of light vehicles to 14.6 million, which is a 13% improvement from last year.
Smaller cars look as if they’re making a comeback
For months, larger vehicles, like full and mid-sized SUVs, and pickup trucks, have been responsible for many auto sales. However, the tide might be changing. Cox Automotive projects that full-sized pickup trucks and mid-size SUVs will likely drop in sales by 13.7% and 6.6%, respectively.
While mid-sized and compact cars and crossover SUVs are all expected to see positive gains. With transaction prices on the rise and gas prices looming high in most states, it makes sense that consumers would decide to steer back to smaller vehicles. If things remain the same, it’s possible that this trend will continue into 2023.
Most automakers have gains, while others flounder
A bright spot for the automotive industry is that demand and sales remained relatively steady in Q3. For some, the supply chain has eased, making it easier for some dealerships to get vehicles on their lots to satisfy consumer demand.
According to Cox Automotive, many customers with lower credit scores have been pushed out of the market, continuing to highlight the looming vehicle affordability problem. However, automotive demand has likely been kept steady by “high-net-worth and high-credit score” individuals ready to buy in this highly competitive market.
TrueCar projected that automakers Ford, Honda, and Stellantis saw year-over-year dips by 14.2%, 11.6%, and 13.6%. Ford ended up seeing a 10% drop in sales, the second month of year-over-year decreases for the brand. Much of the automaker’s sales decline is being attributed to supply chain hiccups that have delayed cars from being shipped to dealership lots.
Alternatively, Hyundai, Nissan, and Kia are expected to see reasonable year-over-year gains at 4.7%, 6.2%, and 10.9%, respectively. However, the larger winners for October are General Motors (GM) and Toyota. Both are projected to see massive gains compared to the previous year, with rises of 52.4% and 26.3%, respectively.
GM will likely see over 200,000 units sold in October, and Toyota is projected to sell over 185,000. For the latter, all car sales were up, with SUV and truck sales seeing some of the highest gains.
In contrast, GM’s Chevrolet Bolt saw some of its best quarterly sales, with larger vehicles like the Silverado and Sierra seeing higher sales due to more manufacturing capacity.
While some automakers struggled in October, the month’s success jumpstarted Q4. Some primary reasons things are turning around are that automakers like Toyota and GM are experiencing better supply chains and can get their cars to dealership lots.
Even amid rising prices, demand remains relatively high. However, affordability for many car buyers remains an issue. As cars make their way back on dealer lots, meeting demand, it will be interesting to see if affordability will start to have a more massive impact on car sales as we move into next year.
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