Ford, GM, Hyundai sales dip in U.S., may drag industry down
Ford, General Motors and Hyundai reported U.S. sales drops last month, apparently dragging the industry to its sixth straight month of declining numbers as auto sales slow from last year's record pace.
Fiat Chrysler sales were down 7.4 per cent, while Ford said its sales declined 5.1 per cent. GM was off 4.7 per cent. Korean automaker Hyundai said its sales dropped 19.2 per cent. Analysts are predicting an overall June drop of more than 2 per cent when all the numbers come in on Monday, even though Toyota, Nissan and Honda each reported small sales gains.
If June sales fall as expected, sales for the first half of the year would be down for the first time since the financial crisis in 2009.
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But Autotrader senior analyst Michelle Krebs said a small dip is not an indication of economic troubles since unemployment is low and consumer confidence remains high. She doesn't expect a recovery in the second half of the year, but also doesn't see a huge decline, predicting full-year sales from between 16.8 million and 17.3 million. That's below last year's record of 17.55 million.
"We think the second half could be a little bit stronger than the first half was," says Krebs, who expects this year still to be the fifth-best year on record. "We don't see any imbalances that suggest anything is going to collapse."
Krebs says sales should remain healthy even though credit is tightening slightly and automakers are cutting back on sweet lease deals. "We're down but not out," she said.
With few exceptions, U.S. buyers continued a trend they've been following for years. They're buying SUVs and trucks and shunning cars. Sales of Toyota's Camry, normally the top-selling non-pickup truck in the U.S., fell nearly 10 per cent. But Ford's F-Series pickup, the top-selling vehicle in America, rose nearly 10 per cent.
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The shift is good news for companies that rely heavily on pickup trucks and SUVs such as Ford, GM and Fiat Chrysler.
Mark LaNeve, Ford's vice-president of sales, said even though Ford's retail sales to individual customers were down 1 per cent in the first half of the year, its revenue will be up because of strong sales of loaded-out light duty and heavy-duty pickup trucks.
The shift won't be such good news for brands like Hyundai, which is heavily dependent on car sales. Sales of Hyundai's Elantra compact car, normally among the brand's top-selling vehicles, fell more than 40 per cent to just over 13,000 cars. A year ago, Hyundai set a sales record for the month of June.
Toyota reported a 2.1 per cent sales increase led by the RAV4 compact SUV, which was up nearly 25 per cent. Honda posted nearly a 1 per cent gain and Nissan sales were up 2 per cent. Volkswagen reported a 15 per cent increase over June of 2016 when sales were depressed due to the company's diesel engine emissions-cheating scandal.