Cramer Remix: Why Wall Street has suddenly turned positive on Kellogg

The consumer packaged goods space has been notoriously difficult, so CNBC’s Jim Cramer wasn’t all that surprised when he saw mass analyst upgrades in the stock of Kellogg.

“They’ve got to like something, don’t they?” the “Mad Money” host quipped. “It might as well be Special K, down nearly 15 percent for the year with a new CEO and a sense that the darned stock has hit bottom, even if the business hasn’t.”

Kellogg, the maker of Eggos waffles and Pringles chips, once had strong growth, but has recently fallen under pressure. The company has had to employ cost-cutting tactics to stay afloat, and while Cramer didn’t want to be too cynical, he found the outlook largely unfavorable.

“The analysts who cover this once great growth category have to find something to love,” Cramer explained. “So they ask themselves, how about a 3 percent yielder where the future looks brighter than the past? How about Kellogg? And that’s how a stock in this bedraggled consumer products group can spike after a long road down, a road I believe that will be less traveled by buyers after the stock moves up a couple of points from here and then the buyers move on.”

Bull market rules

Kai Pfaffenbach | Reuters

Some may think that Cramer is foolish for not being afraid of the red-hot bull market, but in reality, he’s just trying to make you money.

“I am actually less worried about looking like an idiot and more concerned that you might be scared away from the stocks by the tepid conventional wisdom,” he said. “That’s why I think it’s so important that you have to understand how a bull market like this one operates.”

The rules for investing in bull markets are different, so Cramer went over his 6 key guidelines for how to look at stocks when rallies become routine.

Allergan CEO talks unusual patent deal

Brent Saunders, CEO, Allergan

Scott Mlyn | CNBC
Brent Saunders, CEO, Allergan

Allergan’s controversial deal with the Saint Regis Mohawk tribe giving the group the patent rights to one of its key drugs was widely misunderstood, Allergan CEO Brent Saunders told CNBC.

“I think there’s a lot of misunderstanding on why we did it,” Saunders told Cramer in a Wednesday interview. “It wasn’t desperation, it was tenacity.”

In exchange for the patents for Allergan’s eye drug, Restasis, and $13.75 million (plus potentially $15 million in annual royalties), the tribe granted Allergan an exclusive license to sell the drug.

The deal involving the billion-dollar drug drew widespread criticism, raising concerns that Allergan could now raise the price of Restasis while keeping it under patent protection.

But Saunders said that it was simply how the pharmaceutical industry works.

Tom Hayes, CEO, Tyson Foods

Scott Mlyn | CNBC
Tom Hayes, CEO, Tyson Foods

Sustainability is a hot topic across industries, but Tyson Foods CEO Tom Hayes told CNBC that even major food producers like his have to step up to the plate.

“Here’s the issue: If we’re going to feed nine and a half billion people around the world by 2050, we have to be part of the solution. Big food has to get in the ballgame,” Hayes told Cramer when asked about sustainability efforts.

As a start, Tyson, the largest U.S. chicken producer, recently eliminated the use of antibiotics in all of its chicken products.

Cypress Semiconductor CEO: “We play where it matters”

As money pours into the internet of things and autonomous driving industries, Cypress Semiconductor CEO Hassane El-Khoury told CNBCthat his company will undoubtedly grow with them.

“We play where it matters,” El-Khoury told Cramer. “We’re not playing in the commodity, low-density markets, but we have a big focus on auto, we have a focus on IoT, we have a focus on industrial, and you’ll see us playing and taking share there and growing with that market.”

With the No. 1 spot among wireless connectivity chipmakers, Cypress Semiconductor is uniquely positioned to grow business at a massive rate as these industries expand, the CEO said.

“When a customer like Amazon or any customer wants reliable, high-technology connectivity products, they have to go to the leader. That’s Cypress today,” El-Khoury said. “That business grew 80 percent year on year, 80 percent year on year. That’s tremendous growth and that has established our leadership even more for years to come.”

Lightning Round: My only regret about ISRG

In Cramer’s lightning round, he rattled off his take on some callers’ favorite stocks:

Intuitive Surgical: “What can I say? One of my absolute favorite stocks. I like the business model and I like the management. My only regret: Where are they on this show? Why don’t they come on? I love the da Vinci [Surgical System, Intuitive Surgical’s flagship product].”

CME Group Inc.: “I’ll tell you, I wish the [Chicago] Bears played like CME Group, because that stock is a buy, buy, buy, buy, buy, buy, buy, buy, buy.”

Apple’s Tim Cook Says Dividing People a Greater Issue Than Russian Facebook Ads

As Washington lawmakers investigate how Russia exploited social media to influence the 2016 presidential election, Apple CEO Tim Cook says the tech giants have something much greater to be concerned about.

And it affects everyone.

“I don’t believe that the big issue are ads from foreign government. I believe that’s like .1 percent of the issue,” Cook told NBC Nightly News anchor Lester Holt in an exclusive interview that aired Wednesday night.

“The bigger issue is that some of these tools are used to divide people, to manipulate people, to get fake news to people in broad numbers, and so, to influence their thinking,” Cook said. “And this, to me, is the No. 1 through 10 issue.”

In an interview from Apple’s sprawling new Cupertino, California, headquarters, Cook also spoke about customers’ privacy in the age of the internet as well as the release Friday of the iPhone X, the latest incarnation of the company’s flagship product.

Apple’s Silicon Valley peers remained in the spotlight Wednesday as members of the House Intelligence Committee grilled representatives from Facebook, Twitter and Google for their inability to prevent Russia from exposing millions of Americans to ads meant to undermine last year’s election.

On Tuesday, Senators hammered them as well. Sen. Al Franken, D-Minn., asked Facebook how it could “not make the connection that electoral ads paid for in rubles were coming from Russia? How could you not connect those two dots?”

Image: Apple CEO Tim Cook sits down with Lester Holt.
Apple CEO Tim Cook. NBC News

A Facebook rep said the ads bought by “bad actors” was a small percentage, but that “any amount was too much.”

An estimated 126 million Americans— about one-third of the country’s population — received Russian-backed content on Facebook during the 2016 campaign, according to the company.

The tech giants told lawmakers that steps were installed to prevent such meddling again, including the shutting down of suspect accounts.

Cook, in his interview with Holt, said the social media companies have “learned along the way a lot” since the election.

“We’ll probably learn more in those hearings as to the particulars. But I do think that technology itself doesn’t want to be good. It doesn’t want to be anything,” Cook said. “It’s up to the creator of the technology and the user of the technology to make it good.”

Cook, who took the helm of Apple in 2011, said it’s especially important for companies to build trust with their customers, especially at a time when personal data can easily be hacked or used online.

While there’s been much hype surrounding the iPhone X’s facial-recognition technology used as one way to unlock a phone, Cook said people shouldn’t worry that Apple is surreptitiously collecting data.

“We have a chip in here where the image of your face is stored and encrypted. And so, Apple doesn’t have that,” Cook said. “Your device has that.”

Last year, Apple took a stand in favor of privacy by fiercely opposing a court order to unlock the iPhone used by one of the San Bernardino shooters. Cook in an email to employees accused the federal government of an “overreach” that could potentially breach the privacy of millions of customers.

Cook told Holt that if he had to, “I would make the same decision today.”

BOOST YOUR FORD MUSTANG GT TO 700 HP WITH NEW ROUSH SUPERCHARGER KIT

Want to make almost the same power as a Hellcat in your Ford Mustang? Ford has you covered with a new Roush supercharger for the 5.0-liter V-8. The kit, available through Ford Performance, fits either the 2018 Mustang GT or the V-8-powered 2018 F-150. Better yet, the supercharger does not void the engine’s warranty and the kit comes with its own warranty when installed by Ford.

The Roush supercharger kit is designed to work with the 5.0’s new port and direct injection fuel system and is rated at 700 hp and 610 lb-ft of torque for the Mustang GT and 640 hp and 600 lb-ft for the F-150. That is with 93 octane and 12 psi of boost. On the Mustang, the kit can be installed on either the 10-speed automatic or six-speed manual transmission.

“Our teams collaborated to create the most highly engineered, tested and performing supercharger kit on the market,” said Jack Roush, chairman of the board of directors at Roush Performance, in a release. “The combination of the 2018 5.0-liter engine and our all-new, fully integrated 2650 supercharger system yields simply incredible, no-compromise performance.”

From the factory, the 5.0-liter V-8 in the Mustang GT produces 460 hp and 420 lb-ft. The kit adds to that an impressive 240 hp and 190 lb-ft of torque. The 5.0 in the F-150produces 395 hp and 400 lb-ft from the factory, and pumps out an additional 245 hp and 200 lb-ft with the supercharger installed.

The Roush supercharger kit includes all the required installation hardware and an exclusive performance calibration. Expect to see the kit available in early 2018 at Ford dealers, Ford Performance Warehouse Distributors, and Roush dealers. For additional information you can visit Ford Performance Parts.

This is not the first supercharger kit developed by Roush for Ford’s 5.0-liter V-8. In 2015, we saw a Roush Stage 3 supercharger kit developing 670 hp and 545 lb-ft and in 2014 asupercharger kit was said to produce more than 600 hp.

2019 CHEVROLET SILVERADO: WHAT TO EXPECT FROM THE NEW FULL-SIZE TRUCK

Chevrolet Truck’s centennial celebration might end with a full-size bang. Not long after Chevrolet starts its second century of building trucks, the next-generation Silverado will make its debut. Likely arriving for the 2019 model year, the next Silverado will up its game in performance and capability after a generation that never really wowed us. During 2014 Truck of the Year testing, we said the then-new model only caught up to the competition in some ways but didn’t even do that in other ways.

Chevrolet’s midsize Colorado has twice earned our Truck of the Year calipers, and if you’re as curious as we are about the 2019 Silverado, keep reading for our best guesses (the outgoing Silverado is pictured below).


Not a Hard Decision

The 2019 Chevrolet Silverado will stick with a steel body, giving it an advantage for traditionalists not convinced by Ford’s expensive decision to build the F-150 with weight-reducing aluminum. Adding aluminum to development would have increased cost, diverting money that otherwise could be invested back in updated powertrains.


10 for All?

Speaking of updated powertrains, don’t be surprised to see Chevrolet use a 10-speed automatic transmission for V-6 and V-8 gas-powered engine options. Currently, the 2018 Silverado’s 4.3-liter V-6 produces 285 hp and 305 lb-ft of torque—that’s more torque than the Ram 1500 and Ford F-150 but less horsepower than those two rivals. That engine or the more volume-oriented 5.3-liter V-8 might get downsized and add turbochargers, but the 6.2-liter V-8 should continue, giving Chevrolet a powertrain option with well over 400 hp.

A mild hybrid model is likely to make its return on the next-gen Silverado (yes, the eAssist model still exists), but Silverado customers looking for the best marriage of efficiency with capability might be more interested in …


The Diesel

Ford has confirmed a diesel-powered F-150 is on the way, and at Motor Trend, we’ve been impressed by the diesel on the Ram 1500, which was our 2013 and 2014 Truck of the Year. Chevrolet has been introducing diesels across its lineup, adding a 2.8-liter unit on the Colorado, and debuting diesel variants of the Cruze sedan and Equinox crossover. A Silverado diesel for the 2019 or 2020 model year is a real possibility.


But Will it Look Like a Camaro?

In a segment as important to Chevrolet as the full-size truck, the Silverado’s visual updates will clearly establish the 2019 model as new but maintain the current model’s boxy appeal. The split headlight design detail should return, complemented by a more modern LED daytime running light treatment. Those LED daytime running lights, by the way, could be paired with HID headlights on base models—already standard on every 2018 Silverado—or D-Optic LED headlights on higher trims (the feature made its debut on the 2018 Traverse). Updated headlights might improve the current Silverado’s IIHS headlight rating of Poor; the Ram 1500’s ratings go up to Marginal (one rating higher), and the 2018 F-150 also gets a Poor rating.


Ready to Haul

Ford increased the maximum towing capacity on the 2018 F-150 to 13,200 pounds, and the 2018 Silverado already maxes out at an impressive 12,500 pounds. Putting aside the omnipresent battle for top-towing bragging rights, we hope most engine/cab configurations on the 2019 Silverado get a little boost, too.


Rebel, Raptor, and …

Chevrolet offers the Z71 package for those who want more off-road capability than a standard four-wheel-drive system can provide, but the automaker might prepare an even more capable, halo-worthy Silverado model in the next couple years. Ram has the Rebel and Ford the Raptor; with the Colorado ZR2 leading Chevy’s charge in the midsize segment, could a full-size off-road offering be far behind?


Higher Country

When Chevrolet introduced the high-end Silverado High Country model, the automaker originally told us it was trying to fill the space between LTZ and the GMC Sierra Denali trim (a pre-refresh 2014 model is shown here). For the new Silverado, we’re curious to see if that will remain the strategy. Ford already offers three F-150 trims with base prices above $50,000, with the Limited cresting $60,000. Along with general improvements to the Silverado’s overall level of refinement, we expect Chevrolet’s luxury trim—or trims—to reach higher.

The new Silverado could offer a 360-degree multicamera system on higher trims, as well as the automaker’s rear camera mirror.

The outgoing Silverado hasn’t exactly been a Motor Trend favorite, placing third in a 2014 comparison against a Ram 1500 and Ford F-150. Even so, as Chevrolet celebrates an entire century of building trucks, we’re eager to see what the automaker has planned for the 2019 Silverado.

2017 BMW M3 WITH M PERFORMANCE PARTS FIRST TEST REVIEW: DIAL M FOR MODIFICATION

There are two kinds of car buyers: those who drive a car off a dealer lot and are content to leave it that way for the rest of its life and those that have the itch to tinker, personalize, and accessorize. Perhaps better than any other automaker, BMW knows how to appeal to this second type of buyer and tap into their wallet with its line of M Performance Parts. And although some of the parts in the catalog are purely cosmetic, many do actually deliver on the “performance” part of the brand name.

To find out just how much of an improvement you’ll see with BMW’s latest M Performance Parts, we took delivery of an Austin Yellow Metallic 2017 BMW M3equipped with the Competition Package and a long list of dealer-installed upgrades. Like all M3s and M4s with the competition pack, this car makes an additional 19 hp from its twin-turbo 3.0-liter inline-six, bringing output to 444 hp and 406 lb-ft of torque. The competition package also includes a retuned stability control system, Active M differential, and new springs, dampers, and anti-roll bars for the Adaptive M suspension.

But our car came with an even more extreme M Performance suspension ($1,480), which gets you height-adjustable coilover springs that use the existing shocks and can lower the car up to 20 mm (0.8 inch). Other big-ticket items include an M Performance titanium exhaust system ($4,400) and lightweight wheel and summer tire package ($5,495).

The wheel and tire package includes a staggered set of 19-inch front and 20-inch rear split-spoke alloy wheels wrapped in super-sticky Michelin Pilot Sport Cup 2 tires. The titanium exhaust might add some power, but BMW doesn’t specify how much. The automaker says you will save 17 pounds compared to the standard exhaust, however. Whether it makes any more power, the system sounds great at wide-open throttle, though it tends to drone on the highway.

The tires and suspension shined in testing, especially on the figure eight where the modified M3 shaved 0.8 second off the time of a standard M3 Competition Pack. Road test editor Chris Walton noted how flat the car remained on the course and liked the grip of the upgraded rubber. “I was impressed with how well this M3 put the power down, and much of it must be owed to the Cup tires,” he said. The modified M3 also held 1.06 g on the skidpad, greater than an M3 with just the Competition Package (0.98 g) and our old long-term 2015 M3 (0.99 g). Both cars rode on Michelin Pilot Super Sport max performance summer tires versus the modified M3’s DOT-approved competition tires, which are streetable but not recommended in wet conditions. The M Performance Parts-enhanced M3 was also quicker on the dragstrip than the last Competition Pack M3 we tested, hitting 60 mph in 3.8 seconds (versus 4.3 seconds) and completing the quarter mile in 12.1 seconds at 118.7 mph (versus 12.5 seconds at 118 mph). Braking from 60-0 mph was nearly identical at 101 feet.

Given how good this M3 was on the track, it should come as no surprise it was also good on one of my favorite canyon roads. There, the M3 turned in crisply and just stuck in corners with no hint of understeer or oversteer. In testing, the car felt neutral to a point, with a tendency toward oversteer when pushed. But on real roads at a somewhat spirited pace, the chassis and tires complement each other to produce a car that feels well balanced and supremely nimble. The steering feels artificially weighted but accurate, and the wheel is on the meaty side but fits great in the hands, thanks to grippy yet teddy-bear soft Alcantara. The carbon-ceramic brakes offered excellent bite and didn’t fade even through a long string of downhill curves. The seven-speed dual-clutch transmission shifts precisely when you ask it to, and the paddles are long and easy to reach when you’re shuffling your hands on the steering wheel.

But unless this is your weekend canyon carver or track car, odds are you’ll have to live with it in the city, too—and in that environment it’s not nearly as fun to drive. Judging by the fender gaps, our car looked to be dropped to the coilovers’ lowest setting. On top of that, our tester came equipped with the $2,640 carbon-fiber front lip. The lip makes the front end look sporty and expensive, showing off lots of exposed carbon fiber, but front clearance is minimal. Nearly every driveway has to be taken at an angle, and even then you still might scrape if you’re not careful. Height is manually adjustable at the spring perch, so you might want to raise the car if you know you’re going into town or only lower the car when you’re going to the track. You also don’t have to spring for the carbon-fiber lip if you’re worried about scraping. But if you want the look and claimed aero benefits of the lip without the risk of damaging precious carbon fiber, BMW will sell you a matte black plastic unit for $470.

Our tester came loaded with virtually every accessory in the M Performance Parts catalog, which ballooned the MSRP to a staggering $113,715. Yes, that’s a lot more than the 2017 M3’s $64,995 starting price, but that’s only if you order everything on the menu. We specced a 2018 M3 with the dual-clutch transmission, Competition Package, M Performance Suspension, and the lightweight wheels and Pilot Sport Cup 2 tires for $81,120—and you can always add parts as you go. But if money is no object, then don’t let $337-a-piece exhaust tip finishers stop you from living your carbon-fiber dreams.

Of course, BMW isn’t the only game in town when it comes to performance parts. Aftermarket suspension companies such as Bilstein, KW, Öhlins, and many others offer coilover kits for the M3 and M4, and there are countless companies that make wheels and exhaust systems out there. But one benefit of the M Performance coilovers is that, because factory shocks are used, damping can still be adjusted from inside the car if you have the adaptive suspension. And if you have M Performance Parts installed at the dealer, your car’s warranty won’t be affected.

The BMW M Performance Parts catalog has something for everyone. If you simply want a high-performance look, BMW has plenty of decals and carbon fiber and aluminum accessories emblazoned with the M logo. If you want actual performance with measurable gains, your local BMW dealer has that, too.

2017 BMW M3 (Competition Package w/M Performance Parts)
BASE PRICE $64,995
PRICE AS TESTED $113,715
VEHICLE LAYOUT Front-engine, RWD, 5-pass, 4-door sedan
ENGINE 3.0L/444-hp/406-lb-ft twin-turbo DOHC 24-valve I-6
TRANSMISSION 7-speed twin-clutch auto
CURB WEIGHT (F/R DIST) 3,633 lb (53/47%)
WHEELBASE 110.7 in
LENGTH x WIDTH x HEIGHT 184.5 x 73.9 x 56.3 in
0-60 MPH 3.8 sec
QUARTER MILE 12.1 sec @ 118.7 mph
BRAKING, 60-0 MPH 101 ft
LATERAL ACCELERATION 1.06 g (avg)
MT FIGURE EIGHT 23.4 sec @ 0.86 g (avg)
EPA CITY/HWY/COMB FUEL ECON 17/24/19 mpg
ENERGY CONS, CITY/HWY 198/140 kW-hrs/100 miles
CO2 EMISSIONS, COMB 0.99 lb/mile

GM: Cars a drag in 2.2% skid

DETROIT — Solid increases in sales of crossovers and pickups weren’t enough to offset a significant decline in car sales for General Motors in October.

The automaker on Wednesday reported a 2.2 percent decrease to 252,813 vehicles sold last month compared with a year ago. That includes crossovers up 8.3 percent, pickups increasing 8.6 percent and cars dropping 20 percent. Year to date, sales fell 0.9 percent to 2.4 million vehicles.

GM’s crossover sales of 78,957 crossovers for the month were driven by record October sales for five nameplates: the Chevrolet Equinox and Traverse, Buick Encore and Enclave, and GMC Acadia.

Brands: GMC up 4.6%, Cadillac down 0.1%, Chevy down 3.8%, Buick down 4.5%

Notable nameplates: Chevy Silverado up 6.8%, GMC Sierra up 26%, Chevy Equinox up 29%, Buick Encore up 25%, Chevy Cruze down 35%, Chevy Volt down 38%, Chevy Corvette down 49%, Chevy Sonic down 66%, Chevy Bolt 2,781 units (highest since launch in December).

Incentives: $5,105, up 15% from a year earlier, according to ALG.

Average transaction price: $36,865per vehicle, up 0.1% from a year earlier, according to ALG.

Fleet mix: 23.1%, 3.6 percentage points higher than a year ago; 19.4% year-to-date, up 0.3 percentage points.

Inventory: GM reconfirmed its inventory target for the end of the year to be “significantly” below last year’s level of about 843,700 vehicles. Days supply at the end of October was 80, or 813,648 vehicles. That compares with 76 days, or 820,741 vehicles, a month ago.

Quote: Kurt McNeil, GM U.S. vice president of sales operations: “We are heading into the fourth quarter with good momentum, thanks to a strong U.S. economy and very strong pickup and crossover sales.”

Did you know? The GMC brand had its highest ATP ever, driven by the success of its Denali subbrand, which reached 30% of retail sales.

October sales dip but strong SAAR predicted

Automaker Oct. 2017 Oct. 2016 Pct. chng.
    BMW
    Mini
    Rolls-Royce*
  BMW of N.A.
    Alfa Romeo 1,205 23 5139.1%
    Chrysler 11,018 14,181 -22.3%
    Dodge 24,476 41,514 -41.0%
    Fiat 1,769 2,622 -32.5%
    Jeep 67,074 68,826 -2.5%
    Ram 47,831 49,443 -3.3%
  FCA US 153,373 176,609 -13.2%
    Maserati 1,140 1,304 -12.6%
Fiat Chrysler Automobiles 154,513 177,913 -13.2%
    Ford 190,789 178,623 6.8%
    Lincoln 8,909 9,069 -1.8%
  Ford Motor Co. 199,698 187,692 6.4%
    Buick 19,142 20,046 -4.5%
    Cadillac 13,931 13,948 -0.1%
    Chevrolet 175,110 181,964 -3.8%
    GMC 44,630 42,668 4.6%
  General Motors 252,813 258,626 -2.2%
    Acura 12,698 12,869 -1.3%
    Honda 114,655 113,292 1.2%
  Honda Motor Co. 127,353 126,161 0.9%
    Genesis 1,786 1,201 48.7%
    Hyundai 51,224 61,304 -16.4%
    Hyundai Motor America 53,010 62,505 -15.2%
    Kia Motors America 44,397 48,977 -9.4%
  Hyundai-Kia 97,407 111,482 -12.6%
    Jaguar 2,891 3,219 -10.2%
    Land Rover 5,477 5,532 -1.0%
  Jaguar Land Rover N.A. 8,368 8,751 -4.4%
  Mazda N.A. 20,811 22,711 -8.4%
  McLaren Automotive 115 58 98.3%
    Mercedes-Benz 31,401 31,383 0.1%
    Smart USA 140 418 -66.5%
  Mercedes-Benz USA 31,541 31,801 -0.8%
  Mitsubishi Motors N.A. 7,381 7,637 -3.4%
    Infiniti 10,296 11,208 -8.1%
    Nissan 112,716 102,312 10.2%
  Nissan North America 123,012 113,520 8.4%
  Nissan/Mitsubishi** 130,393 121,157 7.6%
  Subaru of America 54,045 53,760 0.5%
  Tesla Motors* 4,900 3,400 44.1%
    Lexus 22,894 24,803 -7.7%
    Scion 2 376 -99.5%
    Toyota 165,538 161,116 2.7%
    Toyota/Scion 165,540 161,492 2.5%
  Toyota Motor Sales U.S.A. 188,434 186,295 1.1%
  Volvo Car USA 7,008 6,340 10.5%
    Audi 19,425 17,721 9.6%
    Bentley 188 312 -39.7%
    Lamborghini* 88 87 1.1%
    Porsche 4,715 4,506 4.6%
    VW 27,732 24,779 11.9%
  VW Group of America 52,148 47,405 10.0%
Other*** 255 252 1.2%
Total 1,329,802 1,343,804 -1.0%

Numbers in this table are calculated by Automotive News based on actual monthly sales reported by the manufacturers and may differ from numbers reported elsewhere.
Source: Automotive News Data Center
Note:
*Estimate
**Renault-Nissan acquired controlling interest in Mitsubishi Motors on Oct. 20, 2016.
***Reflects Aston Martin, Ferrari and Lotus sales.

U.S. sales of the Escape increased 37 percent to 11,036 last month — its best October performance since its launch in 2007, Ford said. Photo credit: DAVID PHILLIPS

U.S. auto sales slipped slightly in October yet the industry is in a position to chalk up its second-strongest selling rate of the year after a robust September.

With all but one automaker reporting, light-vehicle sales declined 1 percent for the month. BMW, citing technical difficulties, has delayed its release until Thursday.

AutoData estimated Wednesday afternoon that the month’s selling rate would be 18.1 million vehicles; General Motors earlier in the day predicted 18 million. A result in that range would be the second-strongest month of the year and much higher than most analysts’ projections. The runner-up so far in 2017 has been February, which saw a rate of 17.5 million.

Previous forecasts from LMC Automotive, Kelley Blue Book and Edmunds saw a 2 percent to 4 percent decline in October. As BMW of North America accounts for just 2 percent of the U.S. market, its results aren’t likely to nudge the preliminary tally by much.

Ford, Nissan, Honda, Volkswagen, Toyota and Subaru posted higher sales tallies. FCA US, General Motors and Hyundai-Kia fell.

The U.S. new-vehicle market, after seven straight annual gains capped by a record 2016, was off 1.7 percent through September.

Here’s how major companies fared in October, followed by forecasts for the

COMPANY RESULTS

Ford

Ford posted a 6.4 percent gain in October sales on stronger truck, crossover and fleet deliveries. Volume rose 6.8 percent at the Ford division but fell 1.8 percent at Lincoln.

Ford said truck sales increased 11 percent and SUV volume rose 5.3 percent, offsetting a 2.4 percent dip in car volume. Retail volume rose 3.5 percent and fleet deliveries rose 15 percent.

GM

GM sales fell 2.2 percent behind a drop of 3.8 percent at Chevrolet. Volume slipped 4.5 percent at Buick and 0.1 percent at Cadillac, but rose 4.6 percent at GMC.

While GM’s truck and crossover sales were strong, car volume skidded 24 percent to 52,800 units last month.

Toyota

A 19 percent surge in light truck volume — an October high — helped Toyota Motor Corp. post a 1.1 percent gain in volume last month. Deliveries rose 2.5 percent at the Toyota division but slid 7.7 percent at Lexus. Combined car demand at Toyota and Lexus skidded 15 percent.

“The first month of the final quarter of 2017 saw sustained strong sales for the industry, and we expect that momentum to continue through the last two months of the year,” said Jack Hollis, group vice president and general manager of the Toyota division.

Nissan

Strong truck and crossover demand helped Nissan Motor Co. sales rise 8.4 percent last month to 123,012 — an October record — with a 10 percent gain at the Nissan brand offsetting an 8.1 percent decline at Infiniti.

FCA US

Lower fleet sales — 23,220 units, down 43 percent in October — continue to undermine overall results at FCA US, which reported a decline of 13 percent. Five of FCA’s six major brands — Jeep, Chrysler, Dodge, Ram and Fiat — posted declines.

Honda

Strong demand for cars helped counter weaker light-truck volumes at Honda Motor Co., which posted a 0.9 percent overall gain in October volume. Sales rose 1.2 percent at the Honda division but dropped 1.3 percent at Acura. American Honda’s car sales, led by the Honda Civic and redesigned Accord, rose 5.9 percent while light truck demand slid 3.6 percent. All of the Honda brand’s light trucks, except the Pilot, posted declines last month.

Volkswagen/Audi

Volkswagen sales were up 12 percent to 27,732 on growing sales of its new crossover lineup. Audi extended its industry-best sales streak to eight consecutive years, rising 9.6 percent to 19,425 with strength from its Q5 and Q7 crossovers.

Subaru

Subaru of America narrowly extended its streak of monthly sales gains to generate its best October ever. Sales in the U.S. were up 0.5 percent to 54,045 vehicles for October. The winning streak is now at 71 months for monthly sales increases.

Hyundai/Kia

Hyundai Motor America said its October sales fell 15 percent to 53,010 vehicles, despite a 49 percent boost from the Genesis brand. Elantra sales slipped 7 percent to 14,733 vehicles. The Tucson compact crossover posted an 8 percent gain to 8,731 deliveries. Santa Fe crossover deliveries ramped up 15 percent to 13,024 vehicles.

At Kia, sales dropped 9.4 percent to 44,397 vehicles, paced by a 29 percent fall in Soul sales to 9,254 deliveries. The Forte compact sedan gained 15 percent to 9,219 deliveries. Cadenza sales improved to 1,021 deliveries from 289 during the same month last year.

SAAR FORECASTS

Analysts polled by Bloomberg had expected the seasonally adjusted sales rate for October to come in at 17.6 million, one of the highest rates of the year, but down from September’s torrid 18.58 million pace and just below October 2016’s 17.85 million rate. A SAAR of 17.5 million or higher would be well above the industry’s sales pace in the first eight months of the year. GM today pegged the October SAAR at 18 million.

SPIFFS

Incentives averaged $3,901 per vehicle in the first 17 days of October, J.D. Power says, topping the month’s previous record set last year, by $66. Power says average transaction prices across the industry also set an October record, rising $615 from a year ago to $32,185, suggesting that rising discounts are not putting a dent in profits. For the month, ALG estimates new-vehicle incentives averaged $3,820, up 8.4 percent from October 2016 but down 1.7 percent from September. Among major automakers, GM and Nissan offered the biggest deals last month, ALG says. (See chart below.)

ODDS & ENDS

  • Automakers are struggling to move lagging 2017 inventory off dealer lots. In October, 72 percent of new vehicles sold were 2017 models, Edmunds said, while last October, 60 percent of new vehicles sold were 2016 models.
  • There were 25 selling days last month compared with 26 in October 2016.
  • U.S. consumers had four weekends to shop for vehicles last month compared with five in October 2016.
  • Among major automakers, only Fiat Chrysler is still looking for its first monthly sales gain this year. Among major brands, Jeep and Hyundai have yet to post a monthly sales advance.

NOTABLE & QUOTABLE

Kelley Blue Book estimates average transaction prices for light vehicles in the United States came in at $35,263 for October, $101 higher than October 2016 and $128 higher than September 2017.

“Transaction prices continue to rise at a slower pace than we’ve seen recently. Prices in the third quarter were up just 1 percent after averaging 3 percent gains in the first half of the year. While Kelley Blue Book expects solid sales in October 2017 with a 17.9 million SAAR, flat transaction prices combined with ever-growing incentive spending signal headwinds for the new-vehicle market as 2017 nears its end.”

    — Tim Fleming, analyst for Kelley Blue Book

October incentive outlays for U.S.
Manufacturer Oct. 2017 incentive forecast Oct. 2016 Sep. 2017 Percent change vs. Oct. 2016 Percent change vs Sept. 2017
BMW (BMW, Mini) $5,028 $6,472 $5,273 -22% -4.6%
Daimler (Mercedes-Benz, Smart) $4,882 $4,770 $5,002 2.3% -2.4%
FCA (Chrysler, Dodge, Jeep, Ram, Fiat) $4,631 $4,185 $4,635 10.7% -0.1%
Ford (Ford, Lincoln) $4,443 $4,060 $4,473 9.4% -0.7%
GM (Buick, Cadillac, Chevrolet, GMC) $5,105 $4,456 $5,215 15% -2.1%
Honda (Acura, Honda) $2,023 $1,899 $1,958 6.5% 3.3%
Hyundai $2,802 $2,467 $2,843 14% -1.4%
Kia $3,915 $3,133 $3,883 25% 0.8%
Nissan (Nissan, Infiniti) $4,428 $4,236 $4,471 4.5% -1%
Subaru $1,084 $1,097 $1,077 -1.2% 0.6%
Toyota (Lexus, Scion, Toyota) $2,684 $2,429 $2,783 10.5% -3.6%
Volkswagen (Audi, Porsche, Volkswagen) $3,597 $3,855 $3,657 -6.7% -1.7%
Industry $3,820 $3,525 $3,885 8.4% -1.7%
Source: ALG

CANADA: Trucks drive October sales gain of 6.3 percent

Trucks and crossovers continued to deliver strong Canadian sales for a number of automakers during October.

Total sales in Canada grew 6.3 percent to 164,214 deliveries, according to the monthly DesRosiers report.

Trucks and utility vehicles drove October sales increases for General Motors Canada and Nissan Canada while F-series trucks proved to be the saving grace for Ford Canada, which saw its sales dip slightly last month.

Meanwhile, the Toyota Camry sedan helped Toyota to a sizeable sales gain in October.

Here’s a look at some of the automakers’ October sales:

GM TRUCKS DELIVER

GM’s line of trucks and utility vehicles lifted the automaker’s total October sales to 26,847 vehicles, up 26.5 percent compared with the same month last year.

Here’s a comment among the thousands in our Project XX Survey that really hit us.

The automaker sold 22,343 total trucks and crossovers last month, up 43.5 percent from October 2016. At the same time, the automaker’s total car sales were down 20.3 percent, to just 4,504 units.

“Month after month we are seeing success across all our brands, led by our dynamic portfolio of crossovers, mid- and full-sized trucks,” GM Canada Vice-President of Sales John Roth said in a statement.

GMC sales, which include the Sliverado truck, were up 35.4 percent to 8,941 units over the same month last year. Chevrolet, which includes the Silverado pickup and popular Equinox crossover, saw its sales rise 20.9 percent, to 14,371 vehicles.

FORD DOWN

Ford sales slipped 2 percent to 21,081 in October as consumers fled from the automaker’s cars.

Ford’s total truck sales were up 5.5 percent to 18,881 units, based mainly on the strength of the F series, which posted its best October on record. Ford sold 10,591 F-series trucks, up 25 percent over the same month last year.

Car sales plunged 39 percent to 2,200 units.

FCA DOWN

Monthly sales for Fiat Chrysler Automobiles fell 12 percent to 17,211 vehicles, according to the DesRosiers Automotive Consultants Inc. Detailed results could not be immediately obtained from FCA on Wednesday.

NISSAN UP

Nissan Canada posted total Canadian sales of 11,577 vehicles in October, good for an increase of 9.4 percent and its best October ever.

The Nissan brand on its own set an October sales record with 10,493 units sold, an increase of 13.1 percent.

Nissan’s best-selling vehicle in Canada, the Nissan Rogue crossover, had sales of 3,483 units, an October record.

The Murano crossover posted 1,303 vehicles sold, an increase of 35.4 percent and also an October sales record.

The automaker’s luxury Infiniti brand sales totalled 1,084 units, a decrease of 17.1 percent year-over-year.

CAMRY DRIVES TOYOTA

Toyota also saw its sales rise in October, up 8.9 percent to 19,671 units led by strong Camry, Sienna and RAV4 sales.

In a climate where Canadians are shifting to trucks and crossovers, Camry sales soared 72 per cent to 1,517 units. Toyota sold just 882 Camry sedans last October. The automaker’s total car sales were up 8.3 percent to 6,625 vehicles.

Toyota truck sales were led by its Sienna minivan and RAV4 SUV with their sales up 24.5 and 10.9 percent, respectively.

Toyota also saw sales of its luxury Lexus brand continue to grow, up eight percent.

HYUNDAI UP

Hyundai Canada reported a small October sales increase of two percent, to 10,206 vehicles.