🤯 Picked by our AI, this stock rallied more than Nvidia this month, yielding 94% since MarchSee the stock

Pick-up trucks remain mainstay for Detroit Three in third quarter

Published 10/02/2019, 02:44 PM
© Reuters. The GM logo is seen at the General Motors plant in Sao Jose dos Campos

By Ankit Ajmera

(Reuters) - The Big Three U.S. automakers on Wednesday reported a rise in sales of pick-up trucks for the third quarter as lower interest rates boosted demand in an otherwise sluggish auto market.

Shares of General Motors (N:GM), Ford Motor (N:F) and Fiat Chrysler (MI:FCHA) were, however, trading lower, tracking a broad selloff in the market over fears of a U.S. slowdown.

While higher vehicle prices and rising interest rates earlier in the year kept car shoppers on the sidelines, recent interest rate cuts helped sales in the third quarter.

Automakers in the United States are also focusing on selling larger SUVs and trucks that are more profitable, as sedans fall out of favor.

"Gas prices and interest rates remain at historically low levels ... (and) support our industry to 17 million plus level for what is now the fifth straight year," Mark LaNeve, Ford's vice president of U.S. marketing, sales and service, said on a call with analysts.

There were concerns that GM's sales could take a hit after 48,000 hourly employees at the top U.S. automaker walked out for the first time in 12 years on Sept. 16 and remain on strike.

GM did not face a severe inventory crunch in the third quarter, as most dealers showed healthy supply levels heading into October, according to an analysis by automotive shopping website CarGurus.

However, the company risks facing parts shortage that could possibly affect sales in the current quarter, likely benefiting rivals including Ford.

Sales of Silverado pick-up trucks jumped 16.6% to 155,482 vehicles, boosting GM's total U.S. sales by 6.3% to 738,638 vehicles.

Sales of Ford's pick-up trucks rose 5% to 240,387, their best third-quarter performance in 14 years, even as overall sales fell 4.9% to 580,251 units, hurt by lower demand for the company's passenger cars including the Taurus sedan.

Fiat Chrysler's sales of its Ram pick-up trucks surged 14% to 161,635, marginally lifting overall sales by 0.1% to 565,034 units.

GM's sales fell slightly short of U.S. car shopping website Edmunds' forecast of 748,746 vehicles, while Ford and Fiat Chrysler beat expectations. Edmunds had expected third-quarter sales for the industry to rise by 0.8% to 4.3 million vehicles, led by volume gains at GM.

Edmunds had forecast Ford's sales at 570,179 vehicles and Fiat Chrysler's at 558,302.

The results showed September U.S. light vehicle seasonally adjusted annualized pace was tracking 17.2 million vehicles, above consensus of 17 million, J.P. Morgan analyst Ryan Brinkman said.

© Reuters. The GM logo is seen at the General Motors plant in Sao Jose dos Campos

Shares of GM fell 4.7% to their near four-month low of $34.41, while those of Ford slumped 5.2% to more than six-month low of $8.44. Fiat Chrysler's U.S.-listed shares slipped 2.1% to $12.46.

Latest comments

Loading next article…
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.