Top U.S. automakers reported a fall in their third-quarter sales on Tuesday, hurt by fewer selling days and weaker consumer spending amid inflationary challenges and higher interest rates.
Carmakers have relied on crossovers and pickup trucks for years to drive the bulk of their sales, but that growth is starting to sputter as customers work with tighter budgets because of economic uncertainties.
General Motors reported a 2.2% fall in quarterly sales, as demand for some of its big pickup trucks such as its best-selling Silverado weakened.
Crosstown rival Ford is expected to post weaker sales growth when it reports third-quarter sales on Wednesday, according to data from Cox Automotive.
Toyota reported an 8% fall in sales but said it had built extra inventory of vehicles and parts ahead of the U.S. port strikes, which began earlier in the day, to minimize disruption.
Industry experts expected automakers to rebound with stronger sales in the third quarter but discounts offered by companies were not enough to invigorate demand.
“Consumers in the market continue to be pressured by high interest rates and slow-to-recede vehicle prices, which are translating to high monthly payments,” said Chris Hopson, principal analyst at S&P Global Mobility.
Chrysler-parent Stellantis on Monday cut its 2024 profit forecast and warned it would burn more cash than expected due to weak global demand and competition from Chinese rivals offering cheaper cars.
Buyers are now opting for more affordable models such as compact pickup trucks and SUVs such as Ford’s Maverick and Chevrolet’s Trax.
Subcompact SUVs and compact cars are two of the hottest vehicle segments right now, helped by their relatively affordable price tags, said Charlie Chesbrough, senior economist at Cox Automotive.
Hyundai posted a 5% rise in quarterly sales, aided by sales of hybrid variants of crossovers such as its Tucson and Santa Fe. Its sister company Kia reported a near 7% decline.