Major automakers reported a fourth straight month of lower U.S. new vehicle sales for June and could be found below expert expectations, regardless of substantial consumer discounts and easy loan terms, providing fresh proof that this year will fall short of 2016’s record year for the market.
Automakers’ shares increased, however, as retail sales to customers were fairly steady at the United States automakers, with General Motors asserting that the market was set for a stronger end to the year.
Industry expert Autodata put the industry’s seasonally adjusted yearly rate of sales at 16.51 million units, which was the lowest rate since February 2015. It came in below Wall Street projection of 16.6 million vehicles and 2 percent lower than the June 2016 figure.
U.S. customers continued to avoid passenger cars in favor of bigger pickup trucks, SUVs and crossovers. Passenger car sales were likewise hurt as some automakers, consisting of GM, have relocated to minimize relatively low-margin sales to rental companies.
The U.S. auto industry has been bracing for a decline after hitting a record 17.55 million new vehicles sales in last year. An excess of almost new used vehicles presents competitors for new automobile sales and automakers have relied significantly on consumer discounts and loosened loaning terms.
GM said its sales dropped about 5 percent against June 2016, however that the market would see stronger sales in the 2nd half of this year against the first half.
“U.S. overall sales are moderating because of an industry-wide pullback in daily rental sales, but essential U.S. economic principles clearly remain favorable,” stated GM chief financial expert Mustafa Mohatarem. “Under the present economic conditions, we expect U.S. retail auto sales will remain strong for the foreseeable future.”
Ford Motor said its June sales were impacted by lower fleet sales to rental firms, businesses and government entities, which dropped 13.9 percent, while sales to consumers were flat.
Wall Street experts stress that the millions of low mileage, off-lease vehicles poised to strike the marketplace between now and the end of 2019 will weigh on future new auto sales.
Ford official Mark LaNeve stated on a conference call that the automaker has observed little proof that its rivals are lowering their reliance on leasing to clinch a sale.
Fiat Chrysler Automobiles said June sales reduced 7 percent against the same month a year ago.
Toyota Motor stated sales increased 2.1 percent against June 2016 and said it saw strong revenue in the RAV4, a light SUV, sales of which boosted 24.7 percent. Sales of another SUV, the 4Runner, increased 16.6 percent.
However sales at Toyota’s Lexus luxury car brand dropped 5.4 percent on the year.
Nissan Motor stated its U.S. sales boosted 2 percent. But while truck, SUV and crossover sales leapt 19.5 percent, sedan sales fell 12.1 percent.
In the last few years, Americans have significantly avoided smaller sized passenger cars in favor of bigger vehicles.
Honda Motor stated sales for June increased 0.8 percent.
