Kinda Sorta: New Car Market Shows Signs of Improvement

Matt Posky
by Matt Posky
kinda sorta new car market shows signs of improvement

Despite ongoing dealer markups, rising interest rates, and evidence suggesting that new vehicles are suffering from a lapse in quality control, the automotive market is allegedly improving – at least in terms of sales volume. U.S. light-vehicle deliveries increased last month from the abysmal levels witnessed in October 2021. But the entire issue basically comes down to the industry managing to produce more cars than it had been.


Automakers have been in a sorry state ever since pandemic-related restrictions were introduced. Factory stalls have been common since 2020 and the lingering effects have left supply chains and economies in shambles. Meanwhile, companies have been shifting around their assets to prioritize low-volume EVs and whatever combustion models they feel will yield the highest returns. It’s a pretty jaded way to tackle the market and has helped push the average transaction price for new vehicles beyond anything you might have thought possible a few years ago.


That’s the necessary disclaimer. Sales are up. But they’re up against a ridiculously low benchmark while the market remains a fairly hostile environment for everyone. Factory price increases, dealer markups, loan terms, and even fuel prices will still be causing problems for shoppers. But the lots will be better stocked, translating into more business overall.


Toyota was one of several automakers having a particularly difficult time avoiding factory stalls this year. However, sales were up 28 percent last month (year-over-year). According to Automotive News, the same was true for Hyundai (which was up 7 percent) and Kia (up 12 percent). Industry-wide, those improvements are assumed to represent a 10-percent increase (vs last October) in overall sales.


That sounds wonderful. But it’s actually more like our earlier piece on wholesale auction pricing – a potentially good sign surrounded by a churning sea of bad ones.


Another problem is that, due to so many automakers having given up issuing monthly reports, we are sort of in the dark about where individual nameplates are currently standing. Based on the data we have, the industry actually looks to be posting fewer sales throughout the first three quarters of 2022 than it did during the same time period in 2021. But when you zoom in on October, things start looking a little better.


Analysts at Baird reported that the seasonally adjusted annualized rate of sales in October came in somewhere around 14.9 million vehicles. However, just about everyone else who bothers tracking the industry pegged those numbers as being too high. Still, it’s substantially better than the 13.21 million vehicles delivered last October and even the analysis issuing the bleakest of estimates assume the industry at least broke even.


As stated earlier, it’s still a mixed bag and not everyone who reported October volumes could feel as good as Toyota.


Ford Motor Co (which includes Lincoln) endured a 10.1-percent drop in volume for the month. The company cited ongoing parts shortages while some of its mainstays (e.g. F-Series, Explorer, Escape) witnessed double-digit declines in volume. But it was propped up by some of its newer models (e.g. Bronco, Maverick). Though demand was said to be healthy, with Ford citing that more than half of its gross vehicle stockpiles remain in transit. Blue Oval is getting orders, it’s just having a hard time getting the relevant vehicles to customers.


Honda likewise referenced supply problems as the primary reason for its having a less-than-optimal October. With volume trending in the wrong direction for 15 consecutive months, the company said October volumes were down 16.8 percent vs the previous year. Like most Japanese or Korean luxury brands, Acura also suffered but had a shorter distance to fall than its volume-focused counterpart. It was down by 9.1 percent last month, though that only equated to 9,136 vehicles on our market vs the 72,409 units Honda moved.


By contrast, Mazda and Subaru saw October volumes rise by roughly 30 percent each. While an important turnaround for both brands, they’re still both down when you take the entire year (thus far) into account. That’s more-or-less what’s going on with Toyota and kind of underlines just how far the industry has fallen these last few years. Ultimately, we’re at least seeing some signs that things are beginning to stabilize. But it would be nice if that coincided with price reductions or more favorable financing.


[Image: PQK/Shutterstock]

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  • William Piper William Piper on Nov 03, 2022

    Doing everything to avoid the “stealerships” and their ridiculous mark-ups. Was told 7 large over sticker right through the door at the local Toyota dealership….supposedly non-negotiable.

    I get times are tough, but it just smacks of greed. If you can wait to buy a new car, wait.

  • THX1136 THX1136 on Nov 04, 2022

    This confirms what I mentioned in an earlier article. 2 lots I had driven by at the time were comfortably full of new vehicles (I know where they position the used & new on the lot). One in particular - a larger Ford dealer - hadn't had much more than approx. 15 new vehicles on their lot a several months back. Now as far as pricing goes . . .

  • ToolGuy My Author has a high level of self-absorption (nothing wrong with that, maybe).Corey you are a Lexus buyer. Told you already but you are pacing yourself (nothing wrong with that, maybe). Keep scratching off non-Lexi from your list and you'll be fine (maybe).Congrats on the new job/new industry.
  • ToolGuy The [url=https://en.wikipedia.org/wiki/Jeep_Cherokee_(XJ)]XJ platform[/url] is super interesting to me, more so after owning one and working on it some (but not a lot, because it didn't need a lot). The overall size is almost perfect; add more space to the back seat (and carry it to the wheelbase) if we are starting over.One could argue, if one knew anything about vehicles, that the 4-door XJ is a major reason why U.S. fleet [all of everyone's vehicles averaged together] fuel economy is so bad in 2023.
  • ToolGuy ToolGuy can't solve all the issues raised here tonight, but this does remind me that I have some very excellent strawberry jam direct from Paris in the fridge.
  • ToolGuy Cool.(ToolGuy supports technology advancement, as well as third-person references)
  • MaintenanceCosts Oddly enough, I bought a metal-roof convertible for a bit less than $20k last year. But it's not on your list; it's an E93 335i, manual, Sport package. Really really nice car to drive, and (while it's been a short time) it's been flawless so far.
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