FCA sales up, Fords down as good ol' cars slowly recede
Judging by last month's sales, the Great American Car is slowly disappearing — for Detroit, anyway.
Fiat Chrysler Automobiles NV's new trucks and SUVs pushed sales 16 percent higher in October — and Ford's aging lineup held the automaker back last month as its crosstown rival spent thousands on incentives to grab pickup market share.
Ford Motor Co. leadership is looking ahead to 2019, when the automaker is scheduled to launch a new Ranger midsize pickup, a new Explorer, new Escape and new Super Duty. By then, the automaker's new Edge and Edge ST will have made it to more dealer lots, too.
"We believe we're gonna do really well," Mark LaNeve, Ford sales chief, said Thursday.
Ford reported its October sales dropped 3.9 percent to 192,616 units. FCA said strong sales from all of its brands powered the 16-percent improvement compared to the same month a year ago.
FCA sold 177,391 vehicles last month, including 141,200 retail units. It's a big leap considering October 2017's sales were inflated by U.S. consumers buying replacement vehicles after hurricanes in the southern U.S. totaled thousands of vehicles. Automakers did have one more selling day this October than they did in 2017.
Ford's truck sales fell 4.9 percent to 88,725 units. Car sales were off 17.1 percent. SUV sales rose 6.7 percent, the automaker reported. Ford's average transaction price hit $36,800, up $1,400 more than last year.
LaNeve said Ford has seen its market share grow in full-size pickups despite new entries from FCA and General Motors Co., which no longer reports monthly sales figures.
"Our strategy to prioritize our trucks, SUVs and vans is paying off with October running at record-level transaction pricing," said LaNeve in a statement. "Our sales mix continues to heavily favor these products, which last month represented 81 percent of sales. F-Series turned in its eighth straight month of sales above 70,000 trucks, while Ford SUVs are operating above the record pace they set last year and van sales continue to post strong gains."
Meantime, FCA sold a historic high number of Ram trucks in October. Sales of the trucks were up 14 percent compared to a year ago. October was the eighth month straight that the automaker has seen truck sales increase. Jeep brand sales were up 9 percent, too.
FCA sales are up 7 percent through 10 months of 2018, a year when most automakers and the industry as a whole expected a sales plateau after record years. Ford sales are down 2.5 percent through 10 months.
Toyota Motor North America reported its sales were up 1.4 percent in October compared to a year ago. The automaker sold 191,102 vehicles last month, and is nearly even through the 10 months of 2018.
Sales of the Camry, Corolla sedan and Prius were all down through 10 months of 2018. None of those vehicles saw sales rise in October, either. Toyota's pickup sales are up 16.6 percent year-to-date; SUV sales are up 9.6 percent in that same time frame.
Subaru of America Inc. reported its monthly sales were up 2.5 percent in October. That marks the 83rd consecutive month of sales increases for the brand flush with the rugged crossovers and SUVs U.S. buyers want.
Analysts had forecast that comparing this year's October sales to last year's sales would be difficult due to the boost automakers saw from people replacing vehicles after the hurricanes. Still, automakers were expected to report higher transaction prices in October compared to a year ago as Ford and FCA specifically rein in sedan sales and push SUVs and trucks.
But while rising transaction prices are good for the automaker, they're generally bad for consumers — it means it costs more for the average U.S. buyer to get a vehicle. While sales are still strong in 2018, rising prices could hurt automakers next year.
"Affordability may be the canary in the coal mine for the level of auto sales as we close out 2018 and begin to look at 2019," said Jeff Schuster, president of Americas Operations and Global Vehicle Forecasts at LMC Automotive. "Transaction prices are still edging higher."
Interest rates are climbing, too. The annual percentage rate on new financed vehicles averaged 6.2 percent in October, the highest in nearly 10 years, according to Edmunds analysis.
That's leading some automakers, like FCA, to increase incentive spending to move new vehicles off dealer lots. Ford has reined in its incentive spending in recent months.
Said Jeremy Acevedo, Edmunds’ manager of industry analysis: "It’s getting harder and harder for shoppers to afford a new car, and if the economy starts to slip, we’re at a point now where we really could start to see some significant impacts in the auto market,"