Perspective: Last Week's Auto Sales Figures Aren't Concerning, They're Returning To Normal

June 6, 2017 9:11 am
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Recent auto sales numbers for May were mixed, continuing a recent trend in the first half of 2017.

Of the big three American auto manufacturers — Ford Motor Company (NYSE:F), General Motors Company (NYSE:GM) and Fiat Chrysler Automobiles NV (NYSE:FCAU) — only Ford posted rising sales. Japanese automakers also had similar results in the U.S.

Quick Figures Recap

  • Ford sales grew 2.2 percent.
  • General Motors sales fell 1.3 percent.
  • Fiat Chrysler USA sales fell 1 percent.
  • Honda Motor Co Ltd (ADR) (NYSE:HMC) sales grew 0.9 percent.
  • Toyota Motor Corp (ADR) (NYSE:TM) sales fell 0.5 percent.
  • Nissan Motor Co Ltd (ADR) (OTC:NSANY) sales fell 1.5 percent.

A Return To Normal

While slipping figures are cause for concern to some, TD Ameritrade Chief Strategist JJ Kinahan sees them as a sign that the status quo has is returning.

“Auto sales had an incredible pace for a year-and-a-half or so,” Kinahan told Benzinga. “It’s going to be very hard to keep that pace going.”

Kinahan attributes the record-breaking demand during this period to the recovery after the financial crisis, but it’s slowing in part thanks to cars that “actually last.” The average age of a car on the road is 12 years old.

He also doesn’t think recent developments in the GM and Fiat Chrysler emissions scandals are the main reasons behind slipping market share compared to Ford, suggesting it has more to do with long-term corporate strategies.

“I think what we’re starting to see is the sort of unmet demand [we’ve had recently] has been very much met,” said Kinahan. “Now we should see, in my opinion at least, more traditional numbers.”

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