Are U.S. car sales in trouble? The answer is a resounding yes if you ask Fiat Automobiles.

The Italian automaker, a subsidiary of Stellantis, only managed to sell 145 cars in the third quarter. The worst part? It operates 357 dealerships across the United States, according to data from ScrapeHero.

That means more than half of Fiat dealerships couldn’t sell a single car between July and September.

FCA’s third-quarter earnings report showed that Fiat dealerships failed to sell a single 500L or Spider model for the entire quarter. They managed to sell one 500 model and 144 500X models.

While Fiat’s U.S. sales have been awful for some time, 2023 is shaping up to be an especially disastrous year for the automaker. The Fiat brand is on track to sell just 427 cars this year—a 46% drop from 2022.

Although FCA’s other brands performed much better than Fiat, most reported a sizable drop in sales. Jeep, Ram, Dodge, and Alfa Romeo reported year-over-year sales declines of between 4% and 23%.

Chrysler was the lone exception, as sales in this category grew 96% on the back of Pacifica sales.

Sales are resilient for now, but rising inventories pose a problem

Luckily for the auto industry, Fiat’s woes are more of an exception than an underlying trend.

In November, auto sales are projected to have reached 1.23 million units, according to S&P Global Mobility. That brings year-to-date sales to around 14 million, or 12% higher than the same month last year.

But the picture isn’t entirely rosy.

Per-unit profits are falling thanks to higher vehicle inventories sitting on dealer lots. More supply is driving prices lower, which is good for consumers but not for dealers.

In fact, new car prices were down 1.9% annually in November to $45,332.

Rising Inventories are a result of pent-up supplier demand after the pandemic. As Black Swan author Nassim Taleb says, “I've seen gluts not followed by shortages, but I've never seen a shortage not followed by a glut.”

Even at the current sales pace, auto purchases are growing at a seasonally adjusted annual rate of 15.5 million units, which is well below June’s peak of 16.22 million.

These figures suggest sales may have peaked for now.

Dealers hitch their success to the consumer

Analysts at J.D. Power and GlobalData attributed November’s strong sales pace to record consumer spending on cars.

In fact, Americans spent roughly $44.5 billion on new vehicles during the month, 9.5% higher compared to a year ago.

The problem is that almost every major indicator of consumer spending suggests Americans are overstretched. Some retailers even predict a “discretionary recession” during the holidays.

Buying a car and shopping at Target isn’t the same, but both experiences rely on credit. Americans owe around $1.08 trillion in credit card debt and have $1.56 trillion in auto loans—both record highs.

There’s evidence that consumers’ appetite for all kinds of credit is declining due to higher interest rates and rising household expenses.

“The restart of student loan repayments in October was a further headwind to add to the mix of high interest rates, sticky inflation, and some lingering supply chain issues,” said David Oakley, a manager of sales forecasting at GlobalData.

"The overall risk in the economy and general affordability risk is expected to keep the market from achieving a higher level of recovery," Oakley said of the auto industry.