U.S. Auto sales fell in August prompting some major automakers on Thursday to forecast that a long-expected sales decline has begun or, at best, industry sales have hit a plateau that could spark a shift to juicer customer incentives, slowed production, or more fleet sales.
The biggest U.S. Automakers, General Motors Co (GM) and Ford Motor Co (F), reported declining sales after a surprisingly strong July.
General Motors Co said August U.S. Sales fell 5.2 percent to 256,429 vehicles, and Ford Motor Co sold 214,482 vehicles in the month, down 8.4 percent. Both were in line with analysts’ expectations.
GM expects that 2016 will not be a repeat of the record high for U.S. Auto sales set last year. On Thursday, it forecast 2016 sales would be 17.3 million vehicles, down from 17.47 million vehicles last year, according to Autodata Corp.
Ford Chief Economist Bryan Bezold said sales have hit a plateau after steadily rising following the 2008-2009 recession. The auto industry outperformed the overall U.S. Economy in those years largely due to pent-up demand that has now played out, he said.
In late July, Ford was the first major automaker to confirm the lofty sales gains achieved since 2010 were at an end, even though they are still about 65 percent higher than the lowest sales year in 2009.
Now the company is predicting that the slide will continue into next year. Mark LaNeve, Ford’s U.S. Sales chief, said on Thursday the company will ring up fewer sales in 2017 than this year. Results in 2016 are expected to fall short of last year’s record high sales of 17.47 million vehicles, according to Autodata Corp.
Wall Street has pressured automaker shares all year as expectations of falling sales were widely expected at some point this year.
Fiat Chrysler Automobiles NV’s sales were up 3 percent versus a year ago. Earlier this year, FCA restated August 2015 sales downward by about 10,800 vehicles. In July, the automaker said it revised more than five years of monthly U.S. Vehicle sales figures amid a U.S. Investigation into claims of inflated figures.
Samsung in talks to buy assets of Fiat’s auto-parts unit:
Toyota Motor Corp (TM) sales fell 5 percent while Nissan Motor Co was off 6.5 percent. Honda Motor Co was down 3.8 percent as Accord sales tumbled 26 percent. Honda-brand car sales fell 10 percent while truck and SUV sales rose 4.5 percent.
Sales are seen down for August as incentives fell 2.2 percent from July, industry analyst TrueCar Inc said.
While GM said this year’s sales will not top results in 2015, it is a moderate slide and they remain sharply above the 2008-2009 recession and the years immediately after.
“All the economic factors continue to point toward a strong second half of the year and another potential record year for the industry,” said Mustafa Mohatarem, GM’s chief economist. “We think the industry is well positioned for a sustainable high level of customer demand.”
Sales of the No. 1 selling model in the United States, the Ford F-Series pickup truck, fell 6 percent overall, but the automaker said it was the best-selling retail sales month for its pickup trucks.
Retail sales cover individual consumers and are generally more lucrative than volume fleet sales to rental car agencies, businesses and government. Rental car sales are particularly low-profit.
GM has boasted all year that it has significantly cut its sales to rental agencies. However, GM’s retail sales fell about 5 percent, in line with its wider total sales decline.
