Ford’s 7.4 percent decline marked its biggest drop of 2017. The same went for GM, down 15 percent, as it held to a strategy of reducing sales to rental fleets. Fiat Chrysler fell 9.5 percent. Nissan backstepped for the second time this year, down 3 percent.
At Honda, volume dropped 1.2 percent last month.
Most of the results so far indicate July is shaping up to be a worse month than analysts had forecast. One exception: Toyota Motor Corp., which tallied a 3 percent gain. This July had one less selling day than July of 2016.
Overall, when other automakers report July results later today, industry sales are forecast to fall 5.4 percent to 6.2 percent from strong July 2016 levels, based on estimates from Edmunds, Kelley Blue Book, J.D. Power and LMC Automotive.
It would be the seventh consecutive monthly decline, even as automakers pile on bigger deals and the general U.S. economy continues to grow and unemployment remains low.
U.S. light-vehicles sales are on pace to fall in 2017 after seven straight annual gains. Volume was down 2.1 percent through June, mostly on lower car and fleet deliveries.
The seasonally adjusted, annualized sales rate is expected to drop to 17 million last month, down sharply from 17.9 million in July 2016, based on analysts polled by Bloomberg. GM today estimated the July SAAR will come in at 16.9 million units.
Ford said retail sales in the U.S. last month slipped 1 percent to 159,492 light vehicles. The company’s U.S. sales have now declined every month this year but one, May.
At GM, sales dropped 15 percent at Chevrolet, 31 percent at Buick, 7.3 percent at GMC and 22 percent at Cadillac. GM’s retail volume — which has remained strong in recent months — dropped 14 percent to 202,220 last month.
GM said it slashed July sales to rental car customers in the U.S. by 80 percent compared to a year ago, to just over 2,700 vehicles, while increasing shipments to commercial fleets.
U.S. commercial vehicle fleet deliveries rose by 40 percent in July to 17,300 vehicles, GM said, noting commercial sales can be as profitable as retail volume.
GM said fleet deliveries accounted for about 11 percent of total July volume.
The company’s average transaction price in the U.S. rose nearly $1,000 to about $36,000 last month compared to July 2016.
“We have strategically decided to reduce car production rather than increase incentive spending or dump vehicles into daily rental fleets, like some of our competitors,” Kurt McNeil, GM’s head of U.S. sales operations, said in a statement. “We are working hard to protect the residual values of our new products and growing quality retail and commercial sales, and July’s ATPs reflect that discipline.”
At Nissan Motor Co., volume dropped 4.1 percent at the Nissan brand and Infiniti volume rose 9 percent. July is only the second month this year that Nissan’s U.S. deliveries have declined as the company continues to gain share in a down market.
Fiat Chrysler Automobile’s July sales fell behind a 6 percent decline in retail volume and 35 percent reduction in fleet business. Ram and Alfa Romeo were the only two FCA brands to post higher sales last month, with volume off 12 percent at Jeep, 30 percent at the Chrysler brand and 12 percent at Dodge.
Volume dropped 1.7 percent at the Honda brand and rose 3.7 percent at Acura. Overall, American Honda truck sales slipped 4.2 percent and car deliveries edged up 1.9 percent.
July could mark the fifth straight month that the SAAR comes in below 17 million, says KBB analyst Tim Fleming, who, along with GM, also sees a 16.9 million SAAR.
Analysts expected every major automaker to tally a decline for last month compared with July 2016, one of the strongest months in what turned out to be a record year.
Ahead of today’s reports, sales were projected by analysts to drop 8 percent at General Motors, 5.5 percent at Ford Motor Co., 3.8 percent at Toyota Motor Corp., 6.1 percent at Fiat Chrysler, 3.3 percent at Nissan, 3.6 percent at Honda Motor Co., 12 percent at Hyundai-Kia and 2.8 percent at Volkswagen-Audi.
Fiat Chrysler and Hyundai-Kia are still searching for their first monthly sales increase of 2017.
J.D. Power says incentives averaged $3,876 per new vehicle in the first two weeks of July, a high for the month and an increase of 7.8 percent from the previous July record set in 2016.
ALG estimates new-vehicle incentives in the U.S. averaged $3,565 last month, or 4.7 percent higher than July 2016. (See chart below.)
Even with slowing sales and rising incentives, automakers have managed to post solid profits because of rising transaction prices and the steady consumer shift from cars to more profitable crossovers and SUVs.
Kelley Blue Book estimates the average transaction price for light vehicles in the United States was $34,721 in July 2017, an increase of $573, or 1.7 percent, from July 2016, yet down 0.3 percent from June.
“Despite modest sales growth for SUVs in a down market, transaction prices in these segments are not particularly strong, with compact SUVs up just 1 percent and midsize SUVs flat,” KKB’s Fleming said.
Barclays analyst Brian Johnson, noting that average transaction prices were up only 0.1 percent in mid-July, said the industry may be close to posting its first decline in monthly average transaction prices since the 2008-09 market collapse.
“With competition further intensifying in the SUV markets, it’s possible that the era of rising ATPs may be over, even in spite of positive mix,” Johnson said in a note to investors last week. “Interestingly, mid-month data shows that GM has pulled back on incentives quite significantly, even in spite of its elevated inventory situation.”
GM’s inventory rose to its highest level in a decade after its U.S. sales fell 4.7 percent in June.
The company reported 980,454 vehicles in stock as of June 30, which is equal to a 105-day supply. On a total-unit basis, it’s the most since June 2007, according to the Automotive News Data Center.
GM is deliberately padding stocks as it prepares to idle several assembly plants for retooling and the introduction of new large pickups. But instead of the 90-day supply of new vehicles it had targeted at mid-year, it had a 105-day supply as of June 30.
GM CFO Chuck Stevens told investors last month the company remains on track to reach a roughly 70-day supply by year’s end.