GM, Ford say July US sales fell

Both automakers reported declines in pickup truck sales, their best-sellers, but strong sales of big SUVs.

Ford Motor Co (F.N) last week became the first major auto manufacturer to predict an end to increasing annual sales since 2009, a prediction that many Wall Street analysts had been making for months.

Nissan Motor Co. reported Tuesday that sales rose 1.2% to 132,475 vehicles – a July record.

Analysts polled by Reuters had expected, on average, 17.7 million vehicles on the annualized basis, and 21 economists polled by Reuters had expected 17.36 million vehicles.

“If automakers expect to outperform last year’s record-breaking sales, they’re going to have to lean more heavily on creating and promoting attractive financing offers to lure new buyers into showrooms”, Caldwell said. Consequently, he said, industry incentives are rising.

The auto industry saw a record year in 2015 with nearly 17.5 million vehicles sold, besting its previous record from the year 2000. USA traded shares of Fiat Chrysler dropped 4.6%.

Each of Ford’s four top-selling models lost ground.

Ford’s sales fell 3 percent to 216,479. Ford said its fleet sales rose 6 percent to 55,321 last month while retail demand dropped 6 percent to 161,158 cars and light trucks.

Other automakers will report sales later Tuesday.

“The growth is over”, Ford Chief Financial Officer Bob Shanks said in an interview with Reuters last week.

Krebs said strong demand will likely mean another record sales year in 2016, though there are likely to be “bumps in the road” and sales are likely to soften in 2017.

Fiat Chrysler said its sales numbers conformed to its new reporting standards.

Automakers turned to discounts to jolt US sales in July, but saw relatively flat sales for the month, suggesting that the industry may be entering a period of heightened competition for market share.

Toyota Motor Corp (7203.T), No. 3 in the USA market, reported sales down 1.4 percent, but it surpassed expectations.

The distinction between retail and overall sales is significant because GM is deliberately reducing its sales to rental-car fleets in order to focus its production on higher-profit retail business.

After a rather dismal month of May, pickup truck sales improved somewhat in June, and the leading full-size pickup opened up a wider lead on its competitors.

The firm estimates transaction prices grew 2.5% to $34,264 for a light vehicle in the U.S.as low interest rates, longer loan terms and increased leasing are helping consumers into pricier cars. “While some of the softness in leasing can be attributed to seasonal fluctuations and the fact that GM’s lease penetration dropped below 20 percent, lease customers are very price sensitive and may need a bit more of a nudge than they’re now getting to convince them to close the deal”. We just hope GM doesn’t forget that this strategy can backfire if it falls back into the habit of chasing market share instead of encouraging organic sales growth.

Ford said its truck sales rose 4.8% for the month, but SUVs and crossovers fell 5.6% and cars declined 9.3%.