U.S. Auto Makers Report Steep Sales Declines in July
02 August 2017 - 12:16AM
Dow Jones News
By Christina Rogers and Mike Colias
Sales for major U.S. auto makers sharply declined in July amid a
modest slump in lease deals that have kept payments low, continuing
an industry slowdown that has led to a glut of inventory on dealer
lots and a spate of discounts.
General Motors Co. reported a 15.4% sales decline in July
compared to the same period a year ago, selling 226,107 cars and
trucks. Ford Motor Co.'s said sales slid 7.4% last month to 199,318
vehicles.
Fiat Chrysler Automobiles N.V.'s posted a 10% decline in July,
selling 161,477 vehicles, as its top-selling Jeep brand continued
to struggle against rivals with newer sport-utility models.
While truck and sport utility demand remains strong, sales of
sedans and other passenger cars have struggled amid low gas
prices.
Full industry results are due later Tuesday for July, which is
typically a strong selling month for auto makers. J.D. Power
anticipates sales fell 5.4% in July, compared to the same month in
2016. The firm notes that manufacturers typically pull back on
sales incentives after the July 4th holiday, "but this year
elevated inventory levels coupled with the sales slowdown, have
compelled them to maintain aggressive discounts throughout
July."
The U.S. auto market, which topped a record 17.5 million in
2016, has grown seven consecutive years. Analysts expect that
growth streak to end in 2017 as dealership traffic slows and fleet
buyers, including rental-car firms, need fewer vehicles.
Car makers also facing a new problem: lenders are backing away
from offering the cut-rate lease deals that kept monthly payments
low and sheet metal flying off dealer lots in recent years.
Leasing accounted for 31.1% of all retail sales in the first
half of 2017, falling slightly from last year's record of 32%,
according to Edmunds.com. Buyers had been increasingly reliant on
leases -- which keep payments low even as car prices rise -- until
this year.
"For a long time, we were all wondering where the ceiling was
for leasing. Now, it has been hit," said Jessica Caldwell, an
analyst for Edmunds.com.
Swelling used-vehicle supply is accelerating the pullback on
leasing, The increased supply comes after used-car values had grown
steadily in the years following the 2009 financial crisis.
Write to Christina Rogers at christina.rogers@wsj.com and Mike
Colias at Mike.Colias@wsj.com
(END) Dow Jones Newswires
August 01, 2017 10:01 ET (14:01 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
General Motors (NYSE:GM)
Historical Stock Chart
From Apr 2024 to May 2024
General Motors (NYSE:GM)
Historical Stock Chart
From May 2023 to May 2024