The speed of U.S. car and light truck sales slowed last month for the 3rd month in a row regardless of high discounts, however financiers bid up shares of General Motors and Ford Motor after executives described strategies to cut stocks.
Automakers reported sales down 1 percent from a year back. This brought the yearly sales rate down to 16.66 million vehicles and light trucks from 17.17 million cars a year earlier, according to figures put together by Motor Intelligence. May is the 3rd straight month that the sales speed has decreased from a year previously.
GM and Ford executives said hope that demand for brand-new vehicles will stabilize in the 2nd half of this year, and stated recent high levels of unsold vehicles will decline. Yet experts alerted that automakers may need to continue heavy discount rates or slash production because of problems varying from rising interest rates to an excess of used cars.
“Underlying financial conditions are still positive,” stated Ford U.S. sales vice president Mark LaNeve, mentioning low rate of interest and gasoline prices and high consumer confidence.
Ford stated it has cut its stock of unsold automobiles to 59 days, which the industry considers typical.
GM’s supply was 101 days, however the automaker stated that mainly represented pickup trucks developed to bring dealers through extended retooling shutdowns later on this year ahead of the launch of a new generation of Chevrolet Silverados and GMC Sierra trucks.
Overall factory downtime related to these design modifications would cut 100,000 automobiles from stock throughout the 2nd half, GM stated. It likewise repeated a promise that by the end of the year, it would return stocks to their levels at the end of 2016.
Ford, strengthened by heavy sales to fleet clients, exceeded GM in U.S. sales in May. Ford sales increased 2.2 percent from a year ago to 241,126 units. GM sales fell 1.3 percent to 237,364.