Car makers struggle to lure US buyers in July

CHICAGO: American consumers’ appetite for cars eased significantly in July, as the industry continued to slow from last year’s record pace, according to released sales figures.

Many car makers posted double digit declines – including General Motors and the US arm of Fiat Chrysler – leading to an industry-wide decline of seven per cent compared to the same period last year and a four-per cent decline from June.

Toyota was the lone exception among the biggest players in the North American market, posting a jump in sales attributed to its popular RAV4 compact SUV.

Demand for SUVs and light trucks remained a bright spot and helped buoy the industry’s selling prices, but incentives to lure in customers also increased, mostly for slower-selling compact models and sedans.

Analysts expected sales to pick up for the remainder of the year, as consumers pay more attention to incentives and companies offer deals to move older models off the lots to make room for 2018 inventory.

The July sales pace amounted to an annual rate of 16.73 million units, seasonally adjusted, down from 17.81 million at this time last year.

“Sales tend to come down and cool off in June and July,” Kelly Blue Book (KBB) analyst Alec Gutierrez told reporters in a conference call.

“We’re going to see greater volume in August and September,” he said, while cautioning that the industry was unlikely to match record sales in 2016, when it sold 17.55 million automobiles in the US.

The overall numbers were mostly in line with expectations, after June’s industry-wide decline of three per cent – from the month prior and in the year-over-year comparison.

But analysts said some car makers did not meet expectations.

“Cars as a group are not selling well, especially at Ford,” said Brian Moody of Autotrader.

“Cars are dragging everything down.” Companies with stronger SUV and truck offerings were in a position to better take advantage of the shift in consumer demand, analysts said.

At General Motors, SUVs and trucks accounted for a staggering 80 per cent of sales.

Still, that was not enough to lift the largest American automaker, which reported a steep 15.4 per cent sales decline in July compared to the same period last year.

“GM needs to consider applying tough love metrics to some car lines.

The numbers are just bleak,” KBB analyst Rebecca Lindland said.

Sales in the US division of Fiat Chrysler plunged 10 per cent, and Ford dropped 7.5 per cent – although its F-series pickups were up nearly six per cent.

Japanese car giant Toyota saw sales increase 3.6 per cent with RAV4 sales topping 40,000 units for the first time.

Other Japanese carmakers were not able to match that success, although their sales were down far less than their American counterparts.

Nissan reported a 3.2 per cent decline, while sales of its SUVs and light trucks rose five per cent – with sales of some models more than tripling.

Honda was down 1.2 per cent, but in an unusual twist it sold more cars than trucks and SUVs.

Honda said its core sedan lineup of Civics and Accords – among the most popular sedans offered in the US – saw a sales gain of 2.8 per cent.

Trucks decreased 1.7 per cent, which the company attributed to limited inventory. — AFP