Market Overview

Most Automakers Report U.S. Sales Decline During July

Most Automakers Report U.S. Sales Decline During July
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While most of automakers reported sales drop in the United States in July, thus triggering a selloff in the auto counter, there are also few positives to look upon. On a unit-wise basis, the sales were below than the expected levels. However, TrueCar Inc (NASDAQ: TRUE) sees that automakers have recorded 0.9 percent growth in revenue to reach $48.9 billion in July.

Clearly, that suggested one thing strongly. The automakers were able to realize better transaction price. TrueCar expects $428 million revenue gain due to increased average price transaction on a year-over-year basis.

TrueCar estimated the average transaction price (ATP) to have increased 1.3 percent to $32,518 for a new light vehicle in July. However, average incentive spending per unit also advanced by $159 to $3,225 in July. The research firm pointed out that the ratio of incentive spending to ATP rose to 9.9 percent from 9.6 percent a year ago.

Related Link: The Silver Lining In Ford: Stock Slammed Since Earnings, But Dividend Yield Now Over 5%

One of the crucial points is that General Motors Company (NYSE: GM)'s inventory levels have come down, easing the pressure of reducing incentive spending in the upcoming months.

While Ford Motor Company (NYSE: F) suffered at the retail levels, GM gained in the segment. Overall, trucks, vans, Jeeps and SUVs generally performed well for most automakers. The main automakers July sales include:

  • Toyota Motor Corp (ADR) (NYSE: TM) reported 1.4 percent drop in sales
  • General Motors sales suffered 1.9 percent fall
  • Ford Motor sales were down 3 percent
  • Fiat Chrysler Automobiles NV (NYSE: FCAU) sales up 0.3 percent
  • Nissan Motor Co Ltd (ADR) (OTC: NSANY) reported 1.2 percent increase
  • Honda Motor Co Ltd (ADR) (NYSE: HMC) gained 4.4 percent sales
  • Volkswagen AG (ADR) (OTC: VLKAY) (OTC: VLKPY) suffered sales drop of 8.2 percent
  • MITSUBISHI MOTOR C NPV (OTC: MMTOF) reported 0.3 percent increase
  • Hyundai Motor America revealed 5.6 percent increase in sales

While a few like Honda Motor surprised the Street analysts' estimations, others like Ford and GM disappointed the Street.

As a result, investors have dumped the auto sector on Tuesday with GM, Ford, Toyota Motor, FCAU trading in the red with significant losses.

However, Ferrari N.V. (NYSE: RACE) bucked the trend to gain 2.5 percent on better-than-expected earnings report.

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