Economy strong, but sales drop in 1st half of year
DETROIT — Unemployment is down, consumer confidence is up, and gas prices and interest rates are still low.
Even so, U.S. auto sales fell 3 percent last month.
It was the sixth straight monthly decline as sales dropped off last year’s record pace. For the first six months, car and truck sales fell 2.1 percent, the first such decrease since the financial crisis in 2009.
But auto executives and industry analysts say it’s no cause for panic. Sales are still strong and aren’t expected to plunge anytime soon. Plus, buyers are still loading out trucks and SUVs with highpriced options, and that’s likely to boost earnings, at least in Detroit.
Sales are falling largely because people who delayed car and truck purchases in the years since the Great Recession have bought new ones, says Jessica Caldwell, executive director of analysis for Edmunds.com. “We’re kind of at the point where we don’t have a boost from that,” she says.
Also, auto companies are cutting lease deals as used-car values fall, curtailing another incentive to buy. And people with lower credit scores are feeling the pinch from lenders tightening standards a bit, sending many into the used car market, Caldwell says.
In June, Ford, General Motors, Fiat Chrysler and Hyundai all reported sales drops. Fiat Chrysler sales were down 7.4 percent, while Ford said its sales declined 5 percent. GM was off 4.8 percent and Korean automaker Hyundai posted a hefty 19.3 percent decrease.