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No Respite In June As Auto Sales Continue To Skid

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No Respite In June As Auto Sales Continue To Skid

June signaled continuity for the year's auto trend, as automakers continued to report lackluster sales.

The sixth month of the year had the same selling days in 2017 as that of 2016. As the trend would have it, car sales continued to head southward. With U.S. automakers looking to wean them off fleet sales, sales in this category suffered.

Forecaster Edmunds estimated U.S. vehicle sales of 1,479,042 in June, which translated to a seasonally adjusted annual rate of 16.6 million units, a 2.3 percent month-over-month drop as well as an annual decline.

"While six straight months of sales declines sounds troubling, June is sandwiched between two major holiday sales events, which makes it a bit of a gloomy month historically," said Jessica Caldwell, executive director of industry analysis, Edmunds.

"Car shoppers are savvy enough to know automakers push the deals on holiday weekends and are willing to hold off on buying until they know they're getting a hot bargain."

Scale Back In Fleet Sales Continues To Hurt GM

General Motors Company (NYSE: GM) said its sales fell 5 percent year over year to 243,155 vehicles, with retail sales falling 3 percent to 202,908 and daily rental sales plunging 54 percent.

There was a silver lining, however: The company said its crossover retail sales climbed 23 percent, with Chevrolet Equinox leading the way.

The company, quoting J.D. Power PIN estimates, said incentive spending as a percent of average transaction prices was 12 percent in June, equal to its calendar year 2016 average. Average transaction prices were up nearly $400 a vehicle to $35,657.

Ford Back To No. 2 Slot With Sales Dip

Ford Motor Company (NYSE: F) reported a 5.1 percent drop in U.S. sales to 227,979 in June, ceding the top position in terms of unit sales to GM after transitorily wresting it from its crosstown rival in May.

On a positive note, retail sales remained unchanged year-over-year at 152,396 but fleet sales plunged 13.9 percent to 75,583. Among the type of vehicles, car sales slumped 23 percent to 52,731, while truck and SUV sales rose 1.2 percent and 3.2 percent, respectively.

The company said average transaction prices rose $1,800.

Fiat Chrysler Once Again In The Red

Extending its Losing Streak, Fiat Chrysler Automobiles NV (NYSE: FCAU) reported a 7-percent sales decline to 187,348 vehicles. Fleet sales led the slide with a 15-percent slide to 47,401 units and retail sales fell a more modest 5 percent to 139,947 units.

Japanese Automakers Fare Better

Toyota Motor Corp (ADR) (NYSE: TM) said its June sales rose 2.1 percent on the year to 202,376 units, with Toyota division reporting 3.2 percent sales growth to 177,981 units.

The company attributed the strength to dealers gaining momentum in the second quarter, especially in light trucks and SUVs.

Honda Motor Co Ltd (ADR) (NYSE: HMC) reported a 0.8 percent increase in June sales to 133,793 vehicles. Honda and Acura brands' combined truck sales rose 1.9 percent to a new June record of 70,067 units, while combined car sales inched down 0.3 percent.

Nissan Motor Co Ltd (ADR) (OTC: NSANY)'s June sales rose 2 percent to 143,328, with Nissan Division sales rising 1.2 percent to 131,057 and Infiniti sales climbing 11 percent to 12,271.

No Doomsday Yet

Meanwhile, Edmunds expressed confidence that auto sales will bounce back in the second half of the year, thanks to strong economic conditions and enticing deals. The firm predicts a still healthy sales pace of 17.2 million vehicles on a SAAR basis, although off 2.3 percent from the record performance in 2016.

GM chief economist Mustafa Mohatarem said the softness is due to an industrywide pullback in daily rental sales. Mohatarem sees the positive U.S. economic fundamentals to support strong U.S. retail vehicle sales for the foreseeable future.

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