New-car market expands 12% in October

The U.S. new light-vehicle market racked up a 12 percent gain in October, with strong retail growth outpacing weaker fleet deliveries, providing some momentum as the key fourth quarter unfolds after a lackluster third quarter.

New light truck and car sales totaled 1.343 million last month, GlobalData said in a preliminary report, exceeding the company's forecast by about 15,000, with retail volume of 1.15 million and fleet shipments of 193,000. Higher incentives, wider selection and extra selling days helped drive volume higher, analysts said.

The seasonally adjusted annualized rate of sales in October came in at 16.18 million, the second-highest reading of the year, Motor Intelligence said, and above the range of forecasts. The sales pace last month was in line with September's 16.1 million rate and up from the 15.65 million in October 2023.

The market fell 1.8 percent in the third quarter and was up just 0.9 percent through September. Elevated prices and borrowing costs have weighed on retail deliveries and kept faster growth in check all year.

"Sales have generally disappointed for much of 2024, but October provided a pleasant change of pace," said David Oakley, manager of sales forecasting for the Americas at GlobalData. "While the fundamentals of the market have probably not shifted to a great extent, some consumers appear to have been enticed by the gradual uptick in incentives, allied with greater vehicle availability and an easing in interest rates."

Because of weaker fleet deliveries in recent months, GlobalData cut its forecast for 2024 industry sales from 15.9 million to 15.8 million, and says volume could come in at 15.7 million if fleet continues to perform below expectations in November and December.

Among the seven auto makers that disclose monthly sales, October results were mostly positive.

Sharply higher truck and hybrid deliveries helped Ford Motor Co. post a 15 percent sales gain in October. Volume rose 14 percent at the Ford division and 36 percent at Lincoln, the company said Nov. 4, with hybrid deliveries jumping 39 percent and trucks up 29 percent.

Sales of the F-Series advanced 26 percent, and Maverick volume rose 14 percent. Demand for other core Ford models also rose: Bronco Sport, up 13 percent, and Escape, up 1.7 percent.

Ford's primary electric vehicles posted mixed results last month: F-150 Lightning off 50 percent and Mustang Mach-E up 21 percent. Ford plans to idle F-150 Lightning output at the end of the year to adjust inventories.

Lincoln's U.S. sales have now risen 12 straight months.

Toyota Motor North America's U.S. sales fell 5 percent in October despite posting a record percentage of deliveries of what it calls "electrified" vehicles: hybrids, plug-in hybrids, EVs and hydrogen-powered vehicles.

The Japanese auto maker's electrified vehicle deliveries topped 50 percent of combined monthly sales at Toyota and Lexus for the first time in October.

Toyota brand sales slipped 5.5 percent to 159,370 in October, dragged down by the recently ended stop sale of the Grand Highlander three-row crossover, as well as sharp declines from the 4Runner SUV and Highlander crossover. Lexus brand sales declined 2.3 percent to 26,559, weighed down by the stop sale of the TX three-row crossover.

Honda Motor Co.'s sales rose 2.1 percent last month to 110,346, with a 2.6 percent gain at the mass market Honda brand offsetting a 2.8 percent decline at Acura. Overall, Honda Motor's car sales slid 16 percent, with Accord off 24 percent, while light truck volume rose 11 percent last month.

Strong sales gains of the Pilot crossover and Odyssey minivan offset a 1.8 percent decline in volume of the top-selling CR-V and HR-V crossovers. Honda noted that sales of its electrified models rose 31 percent year-over-year.

The company said supply issues limited availability of key car models even as Honda brand inventories rose more than threefold from a year earlier to 159,588 at the end of October, and up from 131,990 at the close of September.

Honda is retooling a plant in Marysville, Ohio, to add more flexibility and to build gasoline, gasoline-electric and electric models, leaving just one production line in the meantime to assemble the Acura Integra and TLX, and the Honda Accord and CR-V.

Hyundai and Kia both generated record U.S. new-vehicle deliveries in October, led by strong growth in electric and hybrid models.

Hyundai said sales surged 18 percent to 71,802, while Kia deliveries gained 16 percent to 68,908.

U.S. light-vehicle sales October & YTD

At Hyundai, Sonata sales more than doubled to 6,300, while Ioniq 5 EV deliveries rose 51 percent to 4,498. Both the Tucson and Palisade crossovers saw 27 percent improvements. Hybrid sales surged 91 percent, the auto maker said.

It was the third consecutive year the auto maker set an October record. For the year, Hyundai sales are now up 4 percent.

"We're still very bullish on the market. We've definitely seen a little softness" with uncertainty around the U.S. elections, said Randy Parker, CEO of Hyundai Motor America, adding that he believes Hyundai will be able to set another annual sales record by the end of the year. "We feel pretty good about the market going forward. And, you know, we'll get through the election and everything else, and we'll get back to selling cars."

Hyundai's luxury brand, Genesis, also posted record sales in October, up 21 percent to 6,903, led by record sales of its GV70 and GV80 crossovers.

Kia posted similar October records across its U.S. vehicle lineup, generating records for its electrified models and crossovers. Deliveries of the top-selling Sportage crossover increased 24 percent to 13,681, while Telluride sales rose 14 percent to 9,964. Sales of the new Kia K4 compact sedan reached 7,901 in the month.

Kia sales for the first 10 months of 2024 were down 1.6 percent.

Subaru saw deliveries increase 1.5 percent last month to 54,552, the Japanese brand's 27th consecutive month of year-over-year gains, led by a 16 percent increase in sales of its top-selling nameplate, the Crosstrek. Forester sales fell 13 percent in the month, while Outback sales rose 9.3 percent. The three top-selling nameplates together accounted for 79 percent of Subaru's U.S. sales in October.

Mazda said its sales jumped 59 percent last month to 37,307, its sixth consecutive month of year-over-year sales gains, led by record October sales for the CX-30, CX-50 and CX-90 crossovers, and an all-time best monthly sales total for the CX-70.

Volvo's U.S. sales, off 17 percent in October, dropped for the sixth consecutive month.

Most other auto makers disclose U.S. sales on a quarterly basis.

Uncertainty over the outcome of the U.S. presidential election on Nov. 5 has likely prompted some households to become more cautious about spending, analysts say.

Sales are also being undermined by a drop in leasing in recent years. The number of leases that expired last month fell nearly 11 percent compared with September and was 35 percent lower than October 2023, J.D. Power said, meaning dealers and auto makers have fewer opportunities to sell or lease new vehicles.

Cox Automotive said new-car supplies in October rose 25 percent to 2.76 million, or an 81-day supply, but inventory still remains 20 percent below 2019 levels, before the pandemic and chip shortage upended output. Cox Automotive estimates that 2025 models made up 37 percent of dealer inventory in October, with auto makers dangling more incentives to move older cars and light trucks.

Inventories also still vary widely by brand and model, with gasoline-electric hybrids in short supply across the entire industry.

Cox Automotive said days' supply at Ram, Lincoln and Jaguar are "less than twice the industry average" of 81 days, for the first time in months, while Toyota and Lexus continue to have throughput that is the "envy of the industry."

Discounts continued to rise last month as inventories recover and auto makers and dealers move to entice more consumers off the sidelines. The average incentive per new vehicle was expected to increase 71 percent to $3,149 last month compared with October 2023, J.D. Power and GlobalData estimated, and up $24 per vehicle from September levels.

Japanese brands, which have generally had some of the lowest discounts, accounted for some of the biggest increases in year-on-year deals last month, Motor Intelligence said. October new-vehicle incentives averaged $3,379, or 119 percent higher, at Mazda; $3,573, up 185 percent, at Kia; $2,799, up 83 percent, at Honda; $2,461, up 129 percent, at Subaru; and $1,669, or $686 higher, at Toyota.

The biggest deals continue to be offered on electric vehicles, J.D. Power said, with incentives, expressed as a percentage of the average EV's sticker price, averaging 11.5 percent last month, up sharply from 4.7 percent a year earlier. Tesla's average incentives jumped $4,715 year on year to $5,906 last month, Motor Intelligence estimated.

• There were 27 selling days last month, two more than October 2023 and four more than September.
• October fleet deliveries are expected to total 190,872, down 16 percent from October 2023, J.D. Power and GlobalData said, with fleet volume accounting for 14.4 percent of total light-vehicle sales, down 3 percentage points from a year earlier.
• The average interest rate for a new-vehicle loan was expected to total 6.7 percent last month, down 68 basis points from October 2023, J.D. Power and GlobalData said.
• S&P Global Mobility said retail advertised inventory in the U.S. soared to just over 3 million cars and light trucks in September. "This is a significant 4.7 percent increase from the previous month and breaking the 3 million mark for the first time in our dataset," said Matt Trommer, associate director at S&P Global Mobility. "This surge aligns with a broader trend we've observed over the past two years, where inventory levels consistently rise in the fall."
• J.D. Power estimates that nearly 30 percent of new vehicles sold within 10 days of arriving at a dealership last month, down from a peak of 58 percent in March 2022.
• The average time a new vehicle remains in a dealer's possession before a sale was on track to be 50 days in October, up from 20 days a year earlier, J.D. Power said.

"November traditionally marks the beginning of the holiday sales event season for the automotive industry. This period often sees a focus on premium vehicles, accompanied by manufacturer-backed lease incentives and pricing discounts. As the number of leases expiring in November and December is projected to be nearly 40 percent lower than the same period a year ago, this holiday season may require innovative strategies to entice customers into acquiring a new vehicle."

—Thomas King, president of the data and analytics division at J.D. Power

Philip Nussel, Automotive News staff, contributed to this report.