Morningstar

Auto Sales: Slight Decline but Still Healthy

Both Ford and GM faced tough comparable from last year.

Securities In This Article
Ford Motor Co
(F)
General Motors Co
(GM)

Automakers reported September U.S. light-vehicle sales that faced a difficult year-over-year comparable due to September 2017's large boost from replacement demand after Hurricane Harvey in Houston and from one less selling day in September 2018. Total sales for this September, excluding Audi, which has not reported yet, came in at 1.42 million, down 5.6% year over year. We calculate that on a constant selling days basis, sales declined by 1.8%. We expect the vast majority of the hurricane comparable problem to be in September 2018, but we expect October will also see some negative impact year over year. Despite large negative variances in headlines, we do not think the industry is in a bad position. Sales, although declining, are still healthy, and automakers are enjoying Americans' continued mix shift to light trucks over sedans. The former are nearly 70% of U.S. light-vehicle sales each month, and GM's and Ford's own mix is about 80%.

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About the Author

David Whiston, CFA, CPA, CFE

Strategist
More from Author

David Whiston, CFA, CPA, CFE, is a strategist, AM Industrials, for Morningstar*. He covers stocks in the automotive industry, including dealerships, parts manufacturers, and automakers. He has covered the automotive industry since joining Morningstar in 2007. He writes stock reports, ad hoc reports, stock analyst notes, and builds discounted cash flow models for each company covered. He also assesses their economic moat and makes frequent television and print media appearances in local, national, and international news outlets. Key stocks covered include GM, Ford, CarMax, and all six publicly traded franchise auto dealers, such as AutoNation and Penske Automotive Group.

Before joining Morningstar in 2007, Whiston spent four years in PricewaterhouseCoopers’ New York real estate audit practice and one year in its Chicago office working on real estate acquisition due diligence, gaining experience around assessing an asset’s cash flow.

Whiston holds a bachelor’s degree in business administration with a concentration in accounting from the University of Richmond’s Robins School of Business. He also holds a master’s degree in business administration with concentrations in finance, economics, and organizational behavior from the University of Chicago Booth School of Business. He holds the Chartered Financial Analyst® designation, and he is a Certified Public Accountant and a Certified Fraud Examiner.

In 2012, he ranked first in the specialty retailers and services industry in The Wall Street Journal’s annual “Best on the Street” analysts survey. He ranked first in the same industry in 2011 .

* Morningstar Research Services LLC (“Morningstar”) is a wholly owned subsidiary of Morningstar, Inc

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