Ford, GM Report Declines in Auto Sales
September 01 2016 - 10:40AM
Dow Jones News
The No. 1 and No. 2 U.S. auto makers posted declines in U.S.
auto sales for August, against tough year-over-year comparisons,
although the overall sales pace remained brisk.
General Motors Co. reported sales fell 5.2% in the month to
256,429 vehicles, partly on a planned decline in fleet sales. The
auto maker said retail sales, though, fell about 5% from a year ago
to 212,915 vehicles.
Ford Motor Co.'s sales skidded 8.8% to 213,411 vehicles in the
month. Retail sales fell 8%, the company said, while fleet sales
declined 10%.
Declines at the Detroit car makers are expected to drag down
total industry light-vehicle sales in August, with Ford posting the
steepest decline because of a pullback in business to rental-car
fleets, analysts say.
Meanwhile, Fiat Chrysler Automobiles NV logged a 3.1% increase
to 196,756 vehicles sold in the month, buoyed by its Jeep brand,
which recorded a 12% jump in sales from a year ago. The Dodge and
Ram Truck brands also performed well, posting 5.1% and 1.6%
increases, respectively.
Meanwhile, Asian car makers Toyota Motor Corp., Honda Motor Co.
and Hyundai Motor Co. are projected to report low, single-digit
increases.
Analysts are expecting a down month for August with U.S.
light-vehicle sales projected to slip anywhere from 3% to 5%
compared with the same year-ago month, amplifying concerns that the
U.S. auto industry is entering its first prolonged plateau since
the years leading into the financial crisis.
"As we look at the remainder of the year, the industry faces an
uphill struggle to match last year's performance," said Jeff
Schuster, senior vice president of forecasting at LMC Automotive.
"With mixed economic signals, it certainly looks like the U.S. auto
sales may have peaked in 2015."
WardsAuto.com forecasts a U.S. light-vehicle selling pace of
17.4 million last month, significantly lower than the blistering
17.7 million pace recorded in August 2015 with auto makers in the
U.S. facing difficult comparisons to back half of last year, when
auto-industry sales kicked into high gear to close at a record 17.5
million vehicles.
A GM spokesman said earlier in the week that its August sales
were expected to trail competitors because of tight dealership
inventory and a 20%-off promotion in July that pulled demand
forward, leaving stores with thinner stock in August. The company
has been keeping car supplies trim in an effort to reduce spending
on discounts and boost resale values.
While overall new-car demand remains strong, particularly for
the highly profitable trucks and SUVs that pad company bottom
lines, industry executives and analysts say discounts and sales to
less-profitable fleet operators will continue to play a larger role
in propping up the industry's selling pace, particularly after a
disappointing summer-selling season.
"It wasn't exactly a blockbuster month in August, so that puts
extra pressure on the industry to step up its game in September,
especially this coming Labor Day weekend," said Edmunds.com analyst
Jessica Caldwell. "We're at a critical time where dealers need to
clear out 2016 inventory to make room for 2017s, and that's good
news for shoppers who will see some great deals on outgoing models
in the coming weeks."
Auto-industry spending on sales promotions and other discounts
hit an average of $3,599 per vehicle—the highest ever for the
month, according to researcher J.D. Power.
But the average selling price for a new light vehicle continued
to rise as well. Kelley Blue Book estimated the average transaction
price for a light vehicle rose 2.6% year-over-year to $34,143 in
August.
Low gasoline prices continued to drive strong demand for pricier
pickups and sport-utility vehicles in August, with light-truck
sales accounting for nearly 60% of the industry's monthly retail
sales tally.
"Gas prices managed to stay low this summer, which means that
SUVs and trucks continue to set the tone for the industry," said
Ms. Caldwell, noting trucks and SUVs are expected to outsell cars
for a 36th consecutive month.
Write to Anne Steele at Anne.Steele@wsj.com and Christina Rogers
at christina.rogers@wsj.com
(END) Dow Jones Newswires
September 01, 2016 10:25 ET (14:25 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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