Skip to main content
The Globe and Mail
Support Quality Journalism.
The Globe and Mail
First Access to Latest
Investment News
Collection of curated
e-books and guides
Inform your decisions via
Globe Investor Tools
Just$1.99
per week
for first 24 weeks

Enjoy unlimited digital access
Enjoy Unlimited Digital Access
Get full access to globeandmail.com
Just $1.99 per week for the first 24 weeks
Just $1.99 per week for the first 24 weeks
var select={root:".js-sub-pencil",control:".js-sub-pencil-control",open:"o-sub-pencil--open",closed:"o-sub-pencil--closed"},dom={},allowExpand=!0;function pencilInit(o){var e=arguments.length>1&&void 0!==arguments[1]&&arguments[1];select.root=o,dom.root=document.querySelector(select.root),dom.root&&(dom.control=document.querySelector(select.control),dom.control.addEventListener("click",onToggleClicked),setPanelState(e),window.addEventListener("scroll",onWindowScroll),dom.root.removeAttribute("hidden"))}function isPanelOpen(){return dom.root.classList.contains(select.open)}function setPanelState(o){dom.root.classList[o?"add":"remove"](select.open),dom.root.classList[o?"remove":"add"](select.closed),dom.control.setAttribute("aria-expanded",o)}function onToggleClicked(){var l=!isPanelOpen();setPanelState(l)}function onWindowScroll(){window.requestAnimationFrame(function() {var l=isPanelOpen(),n=0===(document.body.scrollTop||document.documentElement.scrollTop);n||l||!allowExpand?n&&l&&(allowExpand=!0,setPanelState(!1)):(allowExpand=!1,setPanelState(!0))});}pencilInit(".js-sub-pencil",!1); // via darwin-bg var slideIndex = 0; carousel(); function carousel() { var i; var x = document.getElementsByClassName("subs_valueprop"); for (i = 0; i < x.length; i++) { x[i].style.display = "none"; } slideIndex++; if (slideIndex> x.length) { slideIndex = 1; } x[slideIndex - 1].style.display = "block"; setTimeout(carousel, 2500); } //

Automobiles sit on the lot at a car dealership in Carlsbad, Calif. on May 2, 2016.

Mike Blake/Reuters

The U.S. auto sector on Thursday continued to show signs of a recovery from the COVID-19 pandemic as improving demand in the third quarter for new vehicles has General Motors Co and other major automakers scrambling to boost production to rebuild dealer inventories.

While sales in the quarter were down, the trend was positive as demand increased each month, especially among retail consumers for high-profit sports utility vehicles and pickup trucks, industry officials said.

“While the economy has made a substantial rebound in the third quarter, retail auto sales have been even more resilient,” GM Chief Economist Elaine Buckberg said. “Super-low auto loan interest rates have boosted retail auto sales; yet more strength comes from pandemic-induced demand.”

Story continues below advertisement

The third quarter is usually when the industry starts building new models, and piling up inventory for the holiday season. That transition is way behind the normal schedule this year due to the earlier shutdown caused by the outbreak and the initial slow ramp-up in production.

Industry inventories for full-size pickup trucks, for example, stood at 500,000 vehicles heading into Labor Day this year, down from 900,000 last year, according to J.D. Power analyst Tyson Jominy.

GM, which reported a 10 per cent decline in third-quarter sales but said results improved each month, said the seasonally adjusted sales pace for the quarter was expected to be 15.9 million vehicles, up about 4 million vehicles from the previous quarter.

The U.S. auto sector has held up better than other industries, but automakers had a hand in that with aggressive incentives like zero-for-84 months financing, payment deferrals and job assurance programs, J.D. Power’s Jominy said.

Automaker profits are also getting a boost.

Vehicle prices rose 2.5 per cent in September from last year to an average of more than $38,700, Kelley Blue Book said. And incentive spending in the industry fell for the second straight month in September, the first time that has happened since April 2019, Jominy said.

“Automakers are going to report some pretty monster financial quarters here to close a year,” he said. “They’re running the assembly plants flat-out right now and incentives are falling. There’s a lot of positive financial indicators right now in the market.”

Story continues below advertisement

Toyota Motor Corp’s U.S. sales fell 11 per cent in the third quarter, but were up 16 per cent in September.

Fiat Chrysler Automobiles NV reported a 10 per cent fall in U.S. sales in the quarter, but they were 38 per cent higher than the prior quarter and the company cited strong consumer demand.

“We are optimistic about the U.S. market and expect sales to remain strong as we close out 2020,” FCA’s U.S. sales chief, Jeff Kommor, said.

Nissan Motor Co echoed the theme of improving retail sales despite a 32 per cent decline in the quarter.

“From an industry perspective, consumer confidence in the market is rising,” said David Kershaw, Nissan’s North American sales chief.

Be smart with your money. Get the latest investing insights delivered right to your inbox three times a week, with the Globe Investor newsletter. Sign up today.

Your Globe

Build your personal news feed

  1. Follow topics and authors relevant to your reading interests.
  2. Check your Following feed daily, and never miss an article. Access your Following feed from your account menu at the top right corner of every page.

Follow topics related to this article:

View more suggestions in Following Read more about following topics and authors
Report an error
Tickers mentioned in this story
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

If you do not see your comment posted immediately, it is being reviewed by the moderation team and may appear shortly, generally within an hour.

We aim to have all comments reviewed in a timely manner.

Comments that violate our community guidelines will not be posted.

Read our community guidelines here

Discussion loading ...

To view this site properly, enable cookies in your browser. Read our privacy policy to learn more.
How to enable cookies