U.S. vehicle sales fall for seventh straight month
DETROIT - July saw the biggest year-overyear decline in U.S. vehicle sales so far this year, leaving automakers to hope that consumers are just waiting to pounce on Labor Day deals.
U.S. sales of new cars and trucks fell 7% to 1.4 million in July, according to Autodata Corp. It was the seventh straight month of lower sales, and the biggest percentage drop so far this year.
July is often a slower month as buyers vacation and wait for dealers to offer model year clearance events in August and September. This year, big cuts in sales to rental car fleets and commercial customers were also a factor. Hyundai, for example, cut its fleet sales by 77% in July.
General Motors said its sales fell 15% in July, while Hyundai’s dropped 28%. Ford’s sales were down 7.5%. Fiat Chrysler’s sales declined 10%. Volkswagen’s sales fell 5.8%, while Nissan’s sales fell 3%. Honda’s sales were down 1.2%.
Two major automakers bucked the trend. Toyota’s sales rose 3.6% while Subaru’s were up 7%.
Analysts have been predicting lower U.S. sales this year as demand levels out after an unprecedented seven straight years of growth. U.S. new vehicle sales hit a record 17.55 million last year.
July’s pace would put annual sales at 16.7 million. That was lower than expected for Alec Gutierrez, a senior market analyst with the car shopping site Kelley Blue Book. Still, he’s maintaining his full-year forecast of 17.1 million sales.
Mark LaNeve, Ford Motor Co.’s U.S. sales chief, said automakers have been preparing for lower U.S. sales this year. He doesn’t see July as an acceleration of the downward trend. He said GM’s decision to cut sales to low-profit rental car fleets by 81% — or 11,200 vehicles — was a big factor. Ford also cut fleet sales by 26% and had to stop sales of its Transit commercial van for a few weeks while it performed a recall.
“We’re still operating at a very high level,” LaNeve said.
Automakers continue to see healthy profits thanks to consumers’ preference for SUVs. Car shopping site Edmunds.com said the average price paid for a new vehicle in July was $34,558, 2% higher than the same month a year ago. GM said sales of its recently updated GMC Acadia SUV jumped 30%, while sales of Toyota’s RAV4 SUV rose 36% to 41,804, a monthly record.
But car sales are plummeting, hurt by low gas prices and changing tastes. Sales of the Ford Fusion midsize sedan dropped 42%, while sales of the Chevrolet Spark subcompact fell a whopping 82%.
Automakers ramped up deals in July, a trend that’s expected to continue for the rest of the summer as carmakers make way for 2018 models on their lots. Average interest rates on new-vehicle loans fell to a sixmonth low of 4.77% in July as more brands offered zero-percent financing deals, Edmunds said. Toyota was offering zero-percent financing for 72 months on a 2017 Toyota Camry sedan as the 2018 Camry arrived in dealerships.
Gutierrez said buyers can expect incentives to creep up by $200 or so per car in August and September.
Some details from Tuesday’s reports:
GM said sales fell 15.4% to 226,107. GM saw double-digit percentage declines at GMC, Chevrolet, Cadillac and Buick. Sales of GM’s best seller, the Chevrolet Silverado pickup, dropped 15%.
Toyota’s sales rose 3.6% to 222,057. Toyota and Lexus trucks and SUVs climbed 17% but cars struggled. Sales of the Prius hybrid fell 26%.
Ford’s sales dropped 7.5% to 200,212. Ford’s SUV sales were up 2% but car sales dropped 19%. Sales of Ford’s best seller, the F-Series pickup, rose 5.8%.
Fiat Chrysler’s sales fell 10% to 161,477. Its Jeep, Chrysler, Dodge and Fiat brands all saw declines, but Alfa Romeo sales were up. Ram truck sales were flat.
Subaru brand sales gained 6.9% to 55,703. Subaru’s best seller, the Outback SUV, was up 20%.