Auto Gross sales: CarMax Caution Chills GM Inventory, Ford Inventory Forward Of Q3 Stories

U.S. auto sales are seen holding up in the third quarter, as vehicle inventories slowly improve but new headwinds arise. A CarMax demand warning continued to weigh heavily on GM stock and Ford stock Friday.


General Motors (GM), Ford (F), Stellantis (STLA), Toyota Motors (TM) and Honda Motor (HMC) are among those teeing up to disclose September and Q3 sales. They are due to report Monday Oct. 3.

The annualized pace of U.S. new vehicle sales in September is expected to reach 13.3 million units, roughly in line with August, Cox Automotive estimates. By volume, sales in the third quarter are seen reaching nearly 3.4 million units, down slightly both year over year and quarter over quarter, following a sharp Q2 slump.

Cox expects GM, Ford and Tesla to be among the biggest gainers in a Q3 market “still stuck in low gear” as supplies slowly improve.

IBD Live: A New Tool For Daily Stock Market Analysis

But auto stocks sold off hard on Thursday and fell further Friday. Used-car dealer CarMax (KMX) badly missed earnings views Thursday, citing “affordability challenges” amid the rapid rise in interest rates. Moody’s downgraded the global auto industry to negative from stable, also citing customer affordability issues due to higher prices and weaker economies. It also noted higher costs for automakers.

Sometime in early October, Tesla (TSLA) will report global Q3 production and delivery numbers as well.

Here is how automakers are expected to perform in Q3, according to Cox Automotive. The results show sales volume, as well as sales growth or decline vs. a year ago.

General Motors

Q3 sales estimate: 539,028 vehicles, up 21.6%.

Results: Check back Monday.

GM stock shed 3.4% to 32.14 Friday. Shares tumbled 5.65% in Thursday’s stock market action, after snapping a six-day losing streaking on Wednesday. They remain below the 50-day moving average and well below the 200-day line.

In early September, GM CEO Mary Barra said in a TV interview that she sees the chip shortage lasting “into next year, maybe a little beyond.”

Traditional automakers continue to accelerate on electric vehicles, which need more chips.

Recently, GM started initial deliveries of two important new EVs, the Lyriq SUV and Hummer pickup. Investors will be looking for any signs that production has picked up or will soon. An Ultium battery factory finally began production recently.

CarMax stock bounced 1.1% to 65.89 Friday. Shares sank nearly 25% Thursday to their lowest level since April 2020.

Toyota Motor

Q3 sales estimate: 513,846, down 9.2%.

Results: Check back Monday.

Toyota Motor stock lost a further 2.6% Friday. It fell 2.3% Thursday, hitting a 23-month low.

Ford Motor

Q3 sales estimate: 473,595, up 19.1%.

Results: Check back later.

Ford stock gave up 2.1% to 11.23 Friday. Shares skidded 5.8% Thursday, after ending a six-day losing streak Wednesday. They remain far below the 50- and 200-day lines.


Q3 sales estimate: 388,481, down 5.5%.

Results: Check back Monday.

Stellantis stock fell 4.8% Thursday and a further 1.2% Friday.

Honda Motor

Q3 sales estimate: 211,326, down 38.9%.

Results: Check back Monday.

Honda stock retreated 3.2% Thursday to a two-year low. Shares fell another 2.7% Friday.


Q3 sales estimate: 126,844 premium and luxury EVs in the U.S., up 38.3%.

Results: Tesla will report global Q3 deliveries soon, but will not break out U.S. sales.

Tesla stock tumbled 6.8% on Thursday, falling sharply from near its 50-day and 200-day lines. Shares gave up another 1.1% Friday.

Outlook For Q4 Auto Sales

Analysts at J.D. Power and LMC Automotive expect production constraints to continue in October and lead to a “somewhat lumpy” fourth quarter. On Wednesday, analysts at Cox Automotive again lowered their full-year 2022 forecast, now predicting 13.7 million units, down more than 9% from 2021 and the lowest level in a decade.

Those warnings come after Ford cautioned on Sept. 20 that it could have 40,000-45,000 partially built vehicles in inventory at the end of the current third quarter, awaiting parts needed for completion. It still expects to complete and deliver those vehicles in Q4.

Find Aparna Narayanan on Twitter at @IBD_Aparna.


These Are The 5 Best Stocks To Buy And Watch Now

Stocks To Watch: Top-Rated IPOs, Big Caps And Growth Stocks

Find The Latest Stocks Hitting Buy Zones With MarketSmith

Why This IBD Tool Simplifies The Search For Top Stocks

Bear Market Hits Fresh Lows; Tesla, EV Rivals On Tap

Leave a Reply

Your email address will not be published. Required fields are marked *