Summer dol­drums sap auto sales

Dou­ble-digit fall-offs re­ported; Toy­ota, Subaru buck trend

Northwest Arkansas Democrat-Gazette - - BUSINESS & FARM - DEE-ANN DURBIN

DETROIT — U.S. sales of new cars and trucks fell 7 per­cent 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 take va­ca­tions 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 per­cent in July.

General Mo­tors said its sales fell 15 per­cent in July com­pared with July 2016, while Hyundai’s dropped 28 per­cent. Ford’s sales were down 7.5 per­cent. Fiat Chrysler’s sales de­clined 10 per­cent. Volk­swa­gen’s sales fell 5.8 per­cent, while Nis­san’s sales fell 3 per­cent. Honda’s sales were down 1.2 per­cent.

Two ma­jor au­tomak­ers bucked the trend. Toy­ota’s sales rose 3.6 per­cent while Subaru’s jumped 7 per­cent.

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 per­cent — or 11,200 ve­hi­cles — was a big fac­tor. Ford also cut fleet sales by 26 per­cent, and it 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 per­cent higher than the same month a year ago. GM said sales of its re­cently up­dated GMC Aca­dia SUV jumped 30 per­cent, while sales of Toy­ota’s RAV4 SUV rose 36 per­cent to 41,804, a monthly record.

But car sales are plum­met­ing, hurt by low gaso­line prices and chang­ing tastes. Sales of the Ford Fu­sion mid­size sedan dropped 42 per­cent, while sales of the Chevro­let Spark sub­com­pact fell a whop­ping 82 per­cent.

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 six-month low of 4.77 per­cent in July as more brands of­fered no in­ter­est fi­nanc­ing deals, Edmunds said. Toy­ota was of­fer­ing in­ter­est-free 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.

Au­tomak­ers said Tues­day:

■ General Mo­tors Co. said sales fell 15.4 per­cent to 226,107. GM saw dou­bledigit per­cent de­clines at GMC, Chevro­let, Cadil­lac and Buick. Sales of GM’s best-seller, the Chevro­let Sil­ver­ado pickup, dropped 15 per­cent.

■ Toy­ota Mo­tor Corp.’s sales rose 3.6 per­cent to 222,057. Toy­ota and Lexus trucks and SUVs climbed 17 per­cent but cars strug­gled. Sales of the Toy­ota Prius hy­brid fell 26 per­cent.

■ Ford Mo­tor Co.’s sales dropped 7.5 per­cent to 200,212. Ford’s SUV sales were up 2 per­cent but car sales dropped 19 per­cent. Sales of Ford’s best-seller, the F-Se­ries pickup, rose 5.8 per­cent.

■ Fiat Chrysler’s sales fell 10 per­cent to 161,477. Its Jeep, Chrysler, Dodge and Fiat brands all saw de­clines, but Alfa Romeo sales were up. Ram truck sales were flat.

■ Honda Mo­tor Co.’s sales slid 1.2 per­cent to 150,980. In a re­verse, sales of the Civic small car rose 11 per­cent while sales of the CR-V SUV fell 12 per­cent.

■ Nis­san Mo­tor Co.’s sales fell 3.2 per­cent to 128,295. Sales of Nis­san’s re­designed Ti­tan pickup more than tripled, and In­finiti lux­ury brand sales were up. But car sales dropped 11 per­cent.

■ Subaru brand sales gained 6.9 per­cent to 55,703. Subaru’s best-seller, the Out­back SUV, was up 20 per­cent.

■ Hyundai’s sales dropped 27.9 per­cent to 54,063. Sales of its Tuc­son SUV rose 31 per­cent, but that couldn’t over­come deep cuts to rental fleets.

■ Volk­swa­gen brand sales fell 5.8 per­cent to 27,091 as deal­ers sold off older Tiguan SUVs and started get­ting 2018 mod­els on their lots.

AP/RICK BOWMER

A shop­per vis­its with a sales­man for Mark Miller Toy­ota in Salt Lake City, in June. Toy­ota’s sales of new cars and trucks rose 3.6 per­cent in July, bucking the trend of lower sales for U.S. au­tomak­ers.

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