Published: Wed, August 03, 2016
Research | By Jennifer Evans

July US auto sales rose slightly on weaker demand

Ford and General Motors reported US light-vehicle sales in July that fell more than analysts had anticipated while Nissan and Fiat Chrysler gained less than expected, reinforcing concerns that the market may have peaked with last year's record deliveries.

General Motors' sales fell 2 per cent while Ford's us sales fell 3 per cent. Toyota's sales slipped 1 per cent. Volkswagen's sales fell 8 per cent. Honda's sales rose 4 per cent while Nissan's were up 1 per cent.

Ford Motor said sales fell an unexpected 3% to 216,479 units, worse than the projected 0.5% decline.

Nissan Group said its sales rose 1 percent to 132,475.

Fiat Chrysler Automobiles NV (FCHA.MI) (FCAU.N) said its sales rose 0.3 per cent.

Ford SUV sales were down 5.3%, but sales of the Edge were up 4.9% and sales of the Expedition were up 118.4%. A year ago saw record sales of 17.5 million new vehicles.

"It's been six years of unprecedented growth and it had to come to an end", Michelle Krebs, a senior analyst with research AutoTrader, said in an interview. "And I can't answer that". Its sport utility vehicles had a rare down month, with declines of 22 per cent for Explorer and 10 per cent for the Escape compact SUV. Fleet sales - sales to large companies, government customers and rental vehicle companies - were up 6%, with 55,321 sold. Sales of GM's best-seller, the Chevrolet Silverado pickup, were down 4 percent, but sales of the smaller Colorado pickup were up 27 percent.

The Detroit automaker has been scaling back fleet sales to focus on retail sales. Ford F-Series sales total 65,657 pickups - down 1 percent.

GM thinks there is potential for a new record for United States industry auto sales this year, Mohatarem said.

However, the biggest American automaker said that based on its initial estimate, GM's retail market share grew 1 percentage point to 17.9 percent in July, which was the biggest monthly retail market share after December 2011. The industry is hoping for a long plateau at a healthy level, but the days of auto sales driving the USA economy appear to be over.

In the first six months of last year, sales were up 4 percent, or more than double the pace of this year.

Wes Lutz, owner of Extreme Chrysler Dodge Jeep Ram in Jackson, Michigan, said consumers "are maxed out and can barely afford the vehicles they are driving". If you would like to discuss another topic, look for a relevant article.

GM's temporary spike in incentive spending resulted from an eight-day sale in early July to begin the sell-down of several 2016 model year vehicles, the company said. Honda was the rare exception in surprising analysts with an increase in sales instead of a predicted drop. "The bottom line is that we've seen a tougher pricing environment this quarter and we will face one going forward". That was "a dramatic escalation" in incentives, he said. "We'll adjust our plans accordingly to the reality and temper our expectations". We just hope GM doesn't forget that this strategy can backfire if it falls back into the habit of chasing market share instead of encouraging organic sales growth.

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