The auto industry is weathering the economic headwinds of inflation and high gas prices, but the best performance is coming from outside Detroit.

Foreign brands with more hybrid-heavy lineups made gains, according to sales reports from across the U.S. auto sector detailed this week. Meanwhile, each of the Detroit Three automakers saw sales decline in the third quarter of 2026 compared to the same time last year.

The industry overall saw a mild year-over-year sales decline of roughly 1% for the period spanning July to September as buyers, sellers and manufacturers display relative resilience in the face of economic challenges — including high gas prices, high interest rates and a consumer base increasingly split between high and low-income households. That resilience, analysts say, has final sales on pace to land slightly below 2025 levels.

Sales of full-size pickups and SUVs — profit centers for the Detroit-based automakers — were strong. But equally strong increases for Japanese rivals — especially in hybrid vehicle segments — could portend trouble ahead as gas prices remain elevated.

"Vehicle sales declined in September, but this may reflect a hangover from a strong pace of sales this summer," said Grace Zwemmer, an economist at Oxford Economics, in a report on industrywide conditions. "There is little evidence to suggest that high gas prices have weighed on headline vehicle sales; however, they have shifted consumer preferences in favor of hybrid vehicles."

General Motors Co. was the industry's top-selling manufacturer (670,000 units) in the third quarter, despite a roughly 5.5% year-over-year decline for the period. That dip is consistent with its performance from the first half of the year, when the Detroit-based automaker struggled to keep pace with a 2025 boom.

Honda Motor Co. (392,000 units) saw the biggest growth for the quarter at 9.3%, followed by Hyundai Motor Group (506,000 and 5.4%) and Subaru Corp. (168,500 and 4.5%).

Toyota Motor Corp. had a torrid September, posting 8.4% year-over-year sales growth and finishing the quarter in second place for total U.S. volume behind GM. The Japanese automaker sold about 633,000 units, good for a 0.7% bump above last year. Electrified sales — including battery-electric vehicles and traditional hybrids — accounted for more than half of sales.

Looking ahead, Zwemmer and others predicted auto sales would slow down but not swoon too deeply as wealthier customers buoy the market for new cars and trucks. That's a sign of what economists often call a K-shaped economy, where the rich get richer and less-well-off Americans struggle with everyday cost-of-living woes.

"Elevated energy prices and higher interest rates will still make affording a vehicle challenging for lower-income households," Zwemmer wrote. "Still, solid spending by well-to-do consumers will keep a floor under vehicle sales, which will decelerate slightly from its pace last year."

Experts at Mobility Global have predicted an overall slower year of about 16 million vehicle sales in the United States, down from the annual sales of about 17 million typical before the COVID-19 pandemic shook the industry.

As auto prices and other household expenses rise, more drivers are turning to the used market or keeping their vehicles longer to avoid painful monthly payments.

Some observers on Oct. 2 noted that upward pressure on those payments could slow after a poor labor market report. Disappointing jobs numbers hurt many in the economy, but they also make it less likely the Federal Reserve will raise interest rates later this month.

Sales of automakers' most expensive models to wealthier buyers, meanwhile, are keeping the industry profitable. Industry analysts at JD Power say automakers this year made fewer compact SUVs "while ratcheting up production of more profitable, domestically manufactured segments that have been less affected by tariffs," according to a September report.

"Large SUVs, large light-duty pickups, midsize SUVs and midsize cars all have recorded delivery gains," according to the report.

Why are the Detroit Three lagging?

Each of the Detroit Three automakers — GM, Ford Motor Co. and Stellantis NV — lost market share in September, according to an analysis from J.P. Morgan. The firm noted that foreign rivals Honda, Toyota and Hyundai all gained market share.

"We believe this is due in part to a shift towards lower-priced sedans, compared to the D3’s product offerings, which are more heavily weighted to large SUVs and pickup trucks, given ongoing consumer affordability pressure," analysts wrote.

Honda and Hyundai had average transaction prices below $40,000 in August, the most recent month with available data from Kelley Blue Book. By contrast, the Detroit Three all had average transaction prices above $50,000: Ford at about $60,100, Stellantis at $58,900 and GM at $54,300.

Hybrid offerings have been part of the appeal to cost-conscious consumers as they look to save money on dealer lots and at the pump.

"With gas prices still well above their pre-war levels, we expect hybrid vehicles will continue to sell at a pace of more than 200,000 units per month," said Zwemmer, of Oxford Economics. Hybrids made up 15.7% of all new U.S. vehicles in August, close to the all-time high of 17.4% set in May.

That has been a boon for affordably priced offerings from brands like Honda, which sells both ICE and hybrid versions of its Accord, Civic and CR-V models.

GM had sold more than 2.1 million vehicles by October of last year, when sales boomed as buyers rushed to dealerships to beat anticipated tariff-driven price hikes and take advantage of expiring tax incentives for electric vehicle buyers and lessees.

So far this year, GM has sold closer to 2 million vehicles. Its light-duty truck sales remain strong, but it has no mass-market hybrids in its lineup at a time when consumer interest in the segment is picking up. The company's only hybrid comes from its luxury sports car Corvette sub-brand.

Light-duty Chevy Silverado sales went up 13% over the past three months compared with the same quarter last year, and year-to-date sales are up 6.5%. For the light-duty GMC Sierra, sales were up about 3% compared to the same quarter last year and 4.4% so far this year.

The stories were similar for rivals Ford and Stellantis: Where there was growth, it was mostly thanks to trucks. Ford Motor Co. sales totaled about 510,000 in the third quarter, a year-over-year decrease of 6.6% and a continuation of declines from the first half of 2026.

The Dearborn-based automaker again projected confidence despite the decrease, noting that total vehicle sales volume was "essentially unchanged" for the quarter when adjusting for the phaseout of the popular Ford Escape and Lincoln Corsair compact SUVs. The company pointed to strong F-Series sales in September and the Super Duty's "best quarterly production performance in 19 years" as highlights from the quarter.

The Blue Oval brand has limited electrified offerings, but the company's flagship hybrid — the Maverick Hybrid truck — had its best-ever third quarter with sales volume of 27,793 units. Maverick sales of all powertrains (41,970) were up 20.4% compared to the same period last year as consumer interest grew in the budget pickup truck.

Of the Detroit Three, Stellantis was the closest to year-over-year sales growth following a dismal 2025.

The Jeep and Chrysler parent company sold 324,277 vehicles in the quarter spanning July through September. That was a decline of 548 (0.17%) from 324,825 vehicles a year ago.

“Against a highly competitive industry backdrop, we delivered a disciplined third quarter, supported by our motivated dealer network, which continued to drive our retail business,” said Michael Orange, the company's head of U.S. retail sales.

A company press release called the quarterly performance "steady" and noted that year-to-date sales are up 3% through the first three quarters as the transatlantic automaker leans into its fan favorites: powerful, gas-guzzling trucks and muscle cars.

The company's biggest bright spot in the third quarter came from the Ram brand. Total sales of the Ram 1500 truck were up 73% compared to the same period last year, and brand sales overall were up 29%.

And as with Ford, Stellantis saw notable success from the Jeep Cherokee Hybrid, which arrived on dealer lots in late 2025. The vehicle recorded its best-ever retail month (10,344 units) in September as some consumers look for better fuel economy amid spiking gas prices.

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