Auto sales down in July, the worst month of the year

Auto sales down in July, the worst month of the year

Carmakers have used lower-margin sales to rental fleets as a way to avoid shutdowns in plants.

General Motors Co said on Tuesday it slashed July sales to rental auto fleets in the United States by 80 percent compared to a year ago to just over 2,700 vehicles, while increasing sales to commercial fleets. After an unprecedented seven years of growth, analysts are predicting lower US sales this year.

On Tuesday, carmakers in the US said they were continuing to slash their low-margin sales to rental fleets during July as the overall sales pace for USA autos and light trucks fell for the fifth consecutive month.

In a more troubling sign for Detroit, combined sales of large pickups fell 4 percent, and sales of large sport utility vehicles declined by 20 percent.

Taurus sales are down 0.8 percent so far in 2017, and fell by 0.3 percent in July to 2,224 units sold. Fiat Chrysler ended production of many models it at one time sold to rental fleets.

Overall Ford sales in the United States dropped by 7.5 percent in July to 200,212 units, mostly because of a decline in fleet sales.

"New home construction, and the real estate market in general, has been steadily improving and has even surpassed prerecession levels in some parts of the country", Tim Fleming, analyst for Kelley Blue Book, said in a statement.

The average vehicle incentive jumped $279 in July from a year earlier to $3,876, while the average retail transaction price crept up only $42 to $30,772, J.D. Power estimated, based on data from the month's first 18 selling days.

Deliveries plunged 15 percent for GM and 10 percent for Fiat Chrysler, both bigger decreases than analysts projected in a Bloomberg News survey.

Ford said in July that sales fell by 7.5%, but inventory was reduced from 79 days at the end of June to 77 at the end of July.

Related Articles