General Motors and Fiat Chrysler reported better-than-expected third-quarter US auto sales Thursday, pointing to strong demand for trucks and a boost from low interest rates.
Both automakers saw auto sales decline about 10 percent for the quarter ending September 30. Analysts had expected an even bigger drop, but car dealerships have adapted their operations in light of the coronavirus pandemic.
"Our dealers are doing exceptionally well utilizing a combination of customer-facing online technologies... and showroom sales to deliver vehicles safely to our customers," said Kurt McNeil, GM's vice president for US sales operations.
"Industry-wide, dealers are selling a high mix of large pickups as the summer comes to an end. Our strong large pickup and all-new full-size SUV lineups from Chevrolet and GMC are selling extremely fast."
GM reported sales of 665,192 during the quarter, down 9.9 percent from last year. Cox Automotive had projected a drop of 13.5 percent.
FCA also pointed to strength in large vehicles with strong trends for Ram pickup trucks and some Jeep models.
Overall sales came in at 507,351, down 10 percent from the equivalent period of 2019. Cox had estimated a drop of 11.8 percent.
Automakers pointed to a number of factors that have boosted demand in addition to low interest rates.
These include: households having more disposable income for large purchases that might have otherwise gone to vacations, the perception of autos as "safe space" in the coronavirus era and a strong rebound for housing permits.
Auto dealer sentiment had improved significantly from the depths of the second quarter amid coronavirus lockdowns. However dealers are worried about lean vehicle inventories that could crimp sales, according to dealer survey data cited by Cox.
Sales have shown "surprising strenth" in light of inventories that are "far below" year-ago levels, said Charlie Chesbrough, senior economist at Cox.
"Can this continue? Clearly new vehicle buyers haven't been hit as hard as other consumers during this recession, so demand is likely to remain stable over the near-term."