October Auto Market: The Ups and Downs

esa-car-keys-2018-octThe October US auto market (light vehicles) hit a year-high SAAR and had a moderate surprise versus analysts expectations.  FCA and Toyota posted gains, leading the market to a 17.6M SAAR, a 1.7% year-over-year decline, compared to October 2017’s post-Hurricane Harvey rebound (17.9M SAAR). The overall auto market for 2018 is still outpacing 2017, but analysts expect the market to finish down given continued market challenges. Some key points from the month:

  • Fiat Chrysler (+16%) and Toyota (+1.4%) posted year-over-year increases.
  • Ford and GM were both down, -4% and -5.3% respectively. Nissan (-11%) and Honda (-4.1%) also contracted year-over-year.
  • The SAAR finished at 17.59M. Eight of the ten months of 2018 have finished above 17M SAAR.
  • The 17.59M SAAR beat analysts expectations of a 17.3M unit pace.
  • Passenger car sales still languish, down 9%, while light trucks were up 5.2%. This continues a 5-year trend.
  • Inventory turn days for the month increased pace to 69 days, down from the 74 days turn of October 2017.
  • Concerns still linger for an overall 2nd half automotive slowdown: increasing interest rates and average transaction price putting restraints on demand.
  • Through 10 months, 2018 is still up 0.5% versus 2017, but expectations linger that the year will finish below 2017’s full-year in total volume.

With interest rates pushing upwards, higher transaction prices, and quicker inventory turn, the final two months of 2018 may see the auto market relinquish its slim advantage versus 2017, with a mixed bag of ups and downs.


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SAAR: Seasonally adjusted annualized (sales) rate.
Source: October 2018 Auto Sales | Automotive News, November 2018.

Author: Dave Eckstein

Dave Eckstein is a partner in the firm ESA & Company. You can follow Dave on Twitter @DaveEckstein.

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