GM: UAW Strike Probably Means Third-Quarter Sales Strength Won’t Be Repeated in Fourth Quarter
Most automakers reported third-quarter or September U.S. auto sales on Oct. 3 with Wards putting the month’s deliveries to end customers up 18.5% from September 2022, or 13.9% after factoring in one more selling day this September. Third-quarter deliveries grew by 16.8%. The month’s seasonally adjusted annualized selling rate was 15.67 million up from 13.70 million a year ago. J.D. Power estimated September incentives per unit at $1,806 which is 81% higher year over year but off a very low base as poor supply from the chip shortage made discounting a low priority. Incentives as a percentage of average manufacturer’s suggested retail price are only 3.7%—quite low in absolute level terms, even though it’s up 160 basis points year over year. Demand remains robust as consumers realize pent-up demand from the start of the pandemic. The UAW strike will not help fourth-quarter numbers and the Detroit Three entered September with about 40% less dealer inventory than just before the 40-day GM strike four years ago. However, the strike is hitting certain vehicles rather than all plants at once and as of Oct. 3 has not affected full-size pickups or full-size SUV production.
GM’s GM third-quarter deliveries outperformed the industry rising 21.4% with all four brands up, led by Buick’s 54.2% growth thanks to Encore GX crossover volume more than doubling and the new Envista crossover. Chevrolet rose 21.2% and is having its best year since 2019 while GMC, up 18.5%, is having its best year since 2005. We calculate GM’s full-size pickups grew 29.5% with Silverado up over 20% and Sierra up 46%. Higher volumes mean less heavy-duty mix, which was down 620 basis points to 38.8% of full-size pickups, but more volume should help scale costs. Cadillac’s momentum continued with CT5 and Escalade growth offsetting crossover declines to give the brand its best third quarter since 2019. On the all-electric front, the Chevrolet Blazer just began deliveries as did the Silverado to fleet customers.
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