U.S. auto sales slam on brakes in Au­gust

In­dus­try-wide pur­chases fall 4% as con­sumer de­mand hits plateau

Baltimore Sun - - NATION - By Dee-Ann Durbin

DETROIT — U.S. sales of new cars and trucks fell in Au­gust, end­ing sum­mer on a low note for the auto in­dus­try and mak­ing it less likely that this year’s auto sales will match the record set in 2015.

Gen­eral Motors’ sales dropped 5 per­cent from last Au­gust while Ford’s sales were down 8 per­cent. Toy­ota’s sales were down 5 per­cent, Honda’s fell 4 per­cent and Nis­san’s dropped 6.5 per­cent. Volk­swa­gen’s sales dropped 9 per­cent. Hyundai’s sales were flat.

Fiat Chrysler bucked the trend with a 3 per­cent in­crease in sales, while Subaru’s were up 15 per­cent. Both com­pa­nies ben­e­fited from con­sumers’ in­creas­ing pref­er­ence for SUVs. Sales of Fiat Chrysler’s Jeep brand rose 12 per­cent.

Over­all in­dus­try sales dropped 4 per­cent to 1.5 mil­lion ve­hi­cles, ac­cord­ing to Au­to­data Corp. To­tal sales through Au­gust are up less than 1 per­cent over last year.

Af­ter six straight years of growth — and record sales of 17.5 mil­lion new ve­hi­cles last year — the in­dus­try has been brac­ing for a plateau as con­sumer de­mand wanes. U.S. sales out­paced broader eco­nomic growth com­ing out of the re­ces­sion, but now they’re set­tling in to a more sus­tain­able pace.

“We’re no longer in a pe­riod where we have a lot of pent-up de­mand com­ing out of the eco­nomic cri­sis,” said Bryan Be­zold, Ford’s se­nior U.S. econ­o­mist.

But Be­zold noted that even as sales plateau, they re­main near his­tor­i­cally high lev­els, so it’s not all gloomy for the auto in­dus­try. Low gas prices, low Af­ter six straight years of growth — and record sales last year — the auto in­dus­try has been brac­ing for a plateau. in­ter­est rates and strong con­sumer con­fi­dence should keep peo­ple buy­ing, even if it’s at a slower pace.

The big­gest wild card for the re­main­der of this year is how au­tomak­ers re­spond to the soft­ness in the mar­ket. They could ramp up in­cen­tives, which is what hap­pened in Au­gust; car shop­ping site TrueCar.com es­ti­mated that in­cen­tives grew 8 per­cent to an av­er­age of $3,331 per ve­hi­cle. But they need to be care­ful, be­cause those deals hurt prof­its and re­sale val­ues. Au­tomak­ers may also have to cut pro­duc­tion to match con­sumer de­mand.

Cars took the most se­ri­ous beat­ing in Au­gust as buy­ers con­tin­ued to flock to SUVs. Ford’s car sales plum­meted 27 per­cent; its Fu­sion sedan, de­spite a re­cent re­model, was down 33 per­cent. Nis­san said its car sales dropped 25 per­cent, while Toy­ota’s car sales fell 12.5 per­cent.

Michelle Krebs, a se­nior an­a­lyst with Au­to­trader.com, said small and mid­size car sales are drop­ping de­spite good deals, like zero-per­cent fi­nanc­ing for five years on a 2016 Toy­ota Camry.

“For the con­sumer who is OK hav­ing a car, that’s the place to shop,” she said.

Here are more details on Au­gust sales:

Gen­eral Motors said its Cadil­lac sales grew 4 per­cent, thanks in part to its new CT6 sedan and XT5 SUV. But its Buick, Chevro­let and GMC sales fell, and its over­all sales dropped 5 per­cent to 256,429 ve­hi­cles. Sales of GM’s best­seller, the Chevro­let Sil­ver­ado pickup, dropped 5 per­cent. GM has cut back sharply on low-profit sales to rental car com­pa­nies.

Ford Mo­tor Co.’s Ford brand sales were down 9 per­cent, but Lin­coln sales rose 7 per­cent thanks to the new MKXSUV. Ford’s over­all sales fell 8 per­cent to 214,482. Ford’s best-seller, the F-Se­ries pickup, saw a 6-per­cent sales de­cline from last Au­gust, which was a par­tic­u­larly strong month for truck sales.

Toy­ota Mo­tor Corp.’s sales dropped 5 per­cent to 213,125. Toy­ota brand sales were down 5 per­cent while lux­ury Lexus sales dropped 8 per­cent. Low gas prices con­tin­ued to ham­mer hy­brids; sales of the Toy­ota Prius dropped 27 per­cent.


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