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Mixed sales results, but automaker stocks rise on need for cars in Houston

DETROIT — The Big Three Detroit automakers on Friday reported better-than-expected August sales and issued optimistic outlooks for demand as residents of the Houston area replace flood-damaged cars and trucks after Hurricane Harvey, sending their stocks higher. General Motors, Ford and Fiat Chrysler posted mixed August U.S. sales, with GM up 7.5 percent and Ford and Fiat Chrysler down. Japanese automaker Toyota improved sales by nearly 7 percent, while Honda fell 2.4 percent. Still, analysts focused on the potential for Detroit automakers to cut inventories and stabilize used vehicle prices as residents of Houston, the fourth largest city in the United States, are forced to replace tens of thousands, perhaps hundreds of thousands, of vehicles after the devastation from Hurricane Harvey. Mark LaNeve, Ford's U.S. sales chief, told analysts on Friday that following Hurricane Katrina in 2005 "we saw a very dramatic snapback" in demand. That said, Ford sales fell 2.1 percent in August. It sold 209,897 vehicles in the United States, compared with 214,482 a year earlier. Sales were down 1.9 percent in the Ford division and off 5.8 percent at Lincoln. Demand was down for cars, crossovers and SUVs. It was not clear how many vehicles in the Houston area will be scrapped, LaNeve said, saying he had seen estimates ranging from 200,000 to 400,000 to 1 million. Ford's Houston dealers may have lost fewer than 5,000 vehicles in inventory, he said. Ford is the No. 1 automaker in the Houston market, with 18 percent share, according to IHS Markit. The company plans to ship used vehicles to Houston dealers and has "every indication we would have to add some production" of new vehicles to meet demand, LaNeve said. Investor concerns about inventories of unsold vehicles and falling used car prices have weighed on Detroit automakers' shares most of this year. Now, automakers can anticipate a jolt of demand from a big market that is a stronghold for Detroit brand trucks and SUVs. "It's got to be a positive for the industry," LaNeve said. Investors appeared to agree. GM shares rose as much as 3.3 percent to their highest since early March. Ford increased 2.8 percent at $11.34, and Fiat Chrysler's U.S.-traded shares were up 5.2 percent $15.91, hitting their highest in more than five years. GM reported a 7.5 percent increase in U.S. auto sales in August, helped by robust sales of crossovers across its four brands.

GM program sees dealers taking on way more loaner cars

Given the volume of vehicles we're talking about, this is a significant development for GM's bottom line. Bring your car into the dealership for service, and you may need a loaner car in exchange. And with so many recalls being carried out, that means a lot of loaners – especially at General Motors dealerships. That could be one of the reasons why GM is massively expanding its loaner fleet program. While many Chevrolet and Buick-GMC dealerships have an on-site rental car location operated by a third party like Enterprise (which may or may not provide a GM vehicle), others manage their own loaner fleets. But while the range of dealerships operating such fleets was once small, reports Automotive News, the number has been growing rapidly: from the locations responsible for only 20 percent of those brands' sales two years ago to about 90 percent today. The impetus for that growth comes down to a massive expansion of GM's Courtesy Transportation Program. The initiative encourages dealers to ramp up their loaner fleet to a maximum size determined by GM, with a mix determined by the dealer itself, so that a showroom in Texas can be bolstered with a fleet of pickup trucks and a dealer in California can employ more Volt and Camaro Convertible loaners. The dealership gets a $500 credit for each vehicle its puts in its fleet, and can use those vehicles as loaners for service customers, as multi-day test drivers or to rent out separately. The vehicles remain in the dealer's fleet for 90 days or 7,500 miles, then they can be sold as used, but with new-car incentives. The dealer gets a fleet of loaners, customers get to use the loaners, try out a new car overnight or buy a barely used car with attractive incentives, and GM gets to clock more sales. But therein lies the kicker: the automaker counts the dispatch of the loaner new vehicle to the dealership as a new-car sale, which could end up distorting its sales figures. Counting loaner vehicles as sold vehicles is something of an industry-standard practice, but given the volume of vehicles we're talking about, this is a significant development for GM's bottom line. One dealership - Paddock Chevrolet in Kenmore, NY, for example - had no loaner fleet two years ago, but now runs a fleet of 50 vehicles. Multiply that by the 4,000 or so dealers GM has across America and you're talking about the potential for hundreds of thousands of these sorts of sales.

2021 GMC Yukon configurator now open for play-money builds

The 2021 GMC Yukon configurator is open for real and imaginary business. It's missing a number of important options, though, like the AT4 trim and the Premium Capability Package that installs the Air Ride Adaptive Suspension, so the configurator is best suited for practice runs at the moment. Playing our usual game, we started with a livery build in base SLT 2WD trim for an airport shuttle to compare to the livery 2021 Tahoe we built a few days ago. Same as with the Chevy, the GMC offers nine exterior colors. Opposite to the Chevy, the GMC makes you pay for every color except Summit White. Our Onyx Black selection added $195, five colors cost $495, Cayenne Red Tintcoat costs $695, and the super gonzo White Frost Tricoat runs $1,095. We plumped for the SLT Luxury package's driver assistance and convenience features like memory settings for the front passengers, powered seating for the second row, a split third row, the Rear Seat Media Package, and a console lockbox. What began as $59,095 after destination — $4,000 more than the 2021 Tahoe — ended at $64,445, just $2,165 more than our livery Tahoe because the Yukon packages more kit.   The amounts add up a lot quicker at the top end. Our regional rep with a fat bonus check started with a $72,295 Yukon Denali 4WD in the $495 Pearl Beige Metallic with a Teak and Light Shade interior. The $6,500 Denali Premium Package normally costs $500 more, and who can resist a sale? At about 9% of MSRP, it's not a negligible option, but it includes the $1,780 Advanced Technology Package, the $1,500 panoramic sunroof, and a set of 22-inch wheels that are normally $2,995. Since the bonus was big enough to replace the two-year-old jet skis in the garage, our rep added the $465 Max Trailering Package and that automatically appends the ProGrade Trailering features. Put in the Rear Seat Media Package to occupy the kids, locking armrest storage to protect stuff from the kids, and hook up a set of illuminated GMC badges for $535 to wow oncoming vehicles, and the total comes to $83,320. That's more than $10,000 in options without the least effort. However, there aren't any big-money options left to add except a $1,499 rooftop tent.     GM Authority wrote about the package combinations necessary to unlock the Air Ride Adaptive Suspension on the AT4 or Denali trims. Summed up, the check boxes add $3,410 to the price of an AT4, $3,755 to the price of a 2WD Denali, and $6,015 to the price of a 4WD Denali.