Ford joined General Motors in reporting a double-digit surge in U.S. auto sales for the third quarter. GM stock tumbled Wednesday and Ford stock also retreated, after both soared Tuesday.
However, Ford on Tuesday revealed a smaller-than-expected rise in Q3 new vehicle sales after GM's bigger-than-hoped-for jump Monday. Both auto giants affirmed strong consumer demand. GM also noted improving inventories.
Investor concern about the U.S. car market has expanded from supply to demand, with used-car retailer CarMax last week warning on the ability of consumers to afford vehicles amid rising interest rates.
On Monday, Stellantis, Toyota Motor and Honda each reported a drop in Q3 sales. However, Toyota and Honda did better than feared. Tesla on Sunday reported record global Q3 deliveries, but missed views.
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Here is how automakers performed in Q3 vs. the expectations of analysts at Cox Automotive. The results show auto sales volume, as well as sales growth or decline vs. a year ago.
General Motors
Q3 sales estimate: 539,028 vehicles, up 21.6%.
Results: GM sold 555,580 vehicles in Q3, up 24% year over year. In a release, GM touted "strong customer demand" and "modestly improving" vehicle inventories as chip and other parts shortages ease. It also pointed to strong Bolt EV sales and recovering pickup truck sales.
However, GM's Q3 sales were down from 575,911 in Q2.
General Motors also shared important updates on its EV strategy, production and sales. Like other traditional automakers, GM is making a risky and costly shift to electric vehicles from gas and diesel cars. It plans to expand from luxury EVs to more affordable EV models, to coax often hesitant consumers into electric cars.
The launch of three important new EVs in 2023 is on schedule, General Motors said Monday. Those will include the first, all-electric versions of the Silverado truck, Blazer SUV and Equinox SUV, all from its Chevrolet brand, which is known for value.
As of now, GM offers two luxury EVs: the Cadillac Lyriq SUV and Hummer pickup truck. In Q3, GM sold 36 Lyriq EVs in its first quarter of sales. It also sold 411 Hummer EVs, up slightly from 272 in Q2.
GM also offers the Bolt EV, which more than tripled Q3 sales after deep price cuts. But while the Chevy Bolt is an affordable EV, it uses an older-gen electric architecture. The new Lyriq and Hummer, as well as the forthcoming Chevy EV models, are all based on a next-gen architecture, branded Ultium.
A new factory in Ohio recently began producing Ultium-branded battery cells. Three more such factories are planned and will boost the production of new EVs starting in 2023, General Motors said Monday.
Shares of General Motors sank 5.1% Wednesday. GM stock jumped 8.9% to 35.80 in Tuesday's stock market action, adding to Monday's 2.4% gain. Shares sank nearly 10% last week and remain below the 50-day and 200-day moving averages.
On Wednesday, Morgan Stanley analyst Adam Jonas reiterated a neutral rating on GM stock while upgrading Ford to buy. In part, he likes Ford's restructuring moves, especially its creation of Ford Blue and Ford Model-e, the latter an EV focused business.
General Motors said on Tuesday that Jon McNeill, a former executive at Lyft and Tesla, will join its board of directors.
Toyota Motor
Q3 sales estimate: 513,846, down 9.2%.
Results: Toyota sold 526,017 vehicles in Q3, down 7.1% year over year. However, September sales of 179,050 vehicles were up 17.1% from a year ago. "Electrified" vehicles made up nearly 20% of September sales, including fully electric vehicles, fuel cells, hybrids and plug-in hybrids. Toyota's Q3 sales were down from 531,105 in Q2.
Toyota Motor stock added 3.1% to a 4% gain Monday. It sank 5.1% to a 23-month low last week. On Friday, Toyota cut its October production goal by 6.3% because of the chip shortage.
Ford
Q3 sales estimate: 473,595, up 19.1%.
Results: Ford sold 464,674 vehicles in Q3, up 15.9% year over year. In September, overall sales fell 8.9% but EV sales grew 197%. Sales of the F-150 Lightning sales totaled 1,918 in September and 8,760 since its launch in June. Sales of the Mustang Mach-E rose 47% in September vs. a year ago, while the hybrid-electric Maverick leapt 523%. Ford's Q3 sales were down from 483,688 in Q2.
"Demand remains strong with new retail orders rapidly expanding," Andrew Frick, Ford vice president of sales, said in Tuesday's release. In September, high-demand vehicles turned at record rates, he added.
Supply is still an issue. On Sept. 20, Ford cautioned that it could have 40,000-45,000 partially built vehicles in inventory at the end of Q3, awaiting parts needed for completion. It still expects to complete and deliver those vehicles in the current quarter.
Ford stock lost 1.7%. Shares leapt 7.8% to 12.36 Tuesday after advancing 2.4% Monday and diving 9% last week. They remain below the 50- and 200-day lines.
Stellantis
Q3 sales estimate: 388,481, down 5.5%.
Results: Q3 U.S. sales of 385,665, down 6% year over year. Year to date, sales are down 12%. Stellantis's Q3 sales were also down from 408,521 in Q2.
"Our dealers are making every effort to deliver upon each and every customer's needs while we continue to deal with challenging industry supply constraints," U.S. Head of Sales Jeff Kommor said in a Q3 sales release.
Stellantis stock added 5% to a 3.4% gain Monday after a 2.6% slide last week.
Honda
Q3 sales estimate: 211,326, down 38.9%.
Results: Q3 sales of 222,050, down 35.8% year over year. September sales came in over 79,000 as supply issues improved, the company said. Honda's Q3 sales were also down from 239,789 in Q2.
Honda stock climbed 2.4% after advancing 3.7% Monday and sinking 8.2% last week.
Tesla
On Sunday, Tesla reported record global Q3 deliveries that fell short of views. The EV giant blamed logistical challenges, but that could reflect China demand issues. Tesla does not break out U.S. auto sales, which likely were strong.
Tesla stock rallied 2.7% after tumbling 8.6% on Monday, to its lowest level since July. Shares reversed from near their 50-day and 200-day lines last week.
Q3 Auto Sales Seen Slightly Lower
The annualized pace of U.S. new vehicle sales in September will reach 13.3 million units, roughly in line with August, Cox Automotive estimates. By volume, industrywide Q3 sales are seen nearing 3.4 million units, down slightly both year over year and quarter over quarter, following a sharp Q2 slump.
Cox analysts described the U.S. auto market as "stuck in low gear" while supplies slowly improve.
Even for GM and Ford, Q3 sales rose year over year but fell quarter over quarter. GM again outsold Toyota and Ford last quarter.
Q4 Outlook
Analysts at J.D. Power and LMC Automotive expect production constraints to continue in October and lead to a "somewhat lumpy" fourth quarter. On Sept. 28, Cox Auto analysts again lowered their 2022 auto sales forecast, now predicting 13.7 million units, down more than 9% from 2021 and the lowest level in a decade.
Car stocks sold off hard last week. Used-car dealer CarMax badly missed earnings views Sept. 29, citing "affordability challenges" amid the rapid rise in interest rates. Moody's downgraded the global auto industry to negative from stable, also citing customer affordability issues. It also noted higher costs for automakers.
Find Aparna Narayanan on Twitter at @IBD_Aparna.
