Ford car sales plunge in July as Jeep soars
Most major automakers reported new-vehicle sales declines in July as passenger cars continued to slump and some consumers opted for lightly used vehicles.
A strong start to the year also sapped some of the demand for new vehicles in July, analysts said.
The industry is still in good shape. After July’s results, IHS Markit analysts projected full-year new-vehicle sales to hit 17 million vehicles, a healthy rate.
SUVs, crossovers and pickups fared substantially better than passenger cars. About half of the U.S. vehicles sold in July were SUVs, Ford sales analyst Erich Merkle said.
Low gasoline prices, the strong economy and a desire for more room are driving the SUV boom.
The best evidence SUVs are taking over? Look no further than Subaru and Volkswagen – two brands historically known for small vehicles. Both companies posted sales increases in part because of large, new SUV models: the Subaru Ascent and the Volkswagen Atlas.
Automakers are allowing passenger cars to decline in volume instead of trying to jolt sales with discounts. In fact, industry average discounts dried up for the month as most automakers chose profits over sales volume. Average incentives per vehicle dropped $230 compared with a year ago, according to Ford.
“The industry remained very disciplined” instead of racing to gain market share by discounting vehicles, Ford U.S. marketing chief Mark LaNeve said.
And for good reason. Average transaction prices – what buyers actually paid for new vehicles in dealer showrooms – rose 3 percent to $35,359 in July, according to Cox Automotive. The trend is being driven primarily by sales of more expensive vehicles, not necessarily by price increases.
Passenger car prices, however, are going in the opposite direction. Prices of compact cars fell 0.1 percent compared with a year earlier, Cox Automotive said, to an average of $20,412.
At Ford, which has announced plans to phase out most of its passenger-car models, sales of those vehicles plummeted 27.7 percent in July. That contributed to an overall 3.1 percent sales decline for the nation’s secondlargest automaker for the month. General Motors is the largest, but it no longer reports sales figures monthly.
Even the Japanese automakers that have historically made the most popular passenger cars are not immune from the segment’s decline. Toyota recorded a 6 percent overall sales decline, including an 18 percent drop in passenger cars. Honda was down 8.2 percent overall; the company’s stalwart Accord and Civic plunged 19.3 percent and 28.3 percent, respectively.
Fiat Chrysler Automobiles bucked the industry’s July sales decline with a 5.9 percent increase for the month as the company’s Jeep SUV brand continued to soar.