U.S. auto sales were down 1.9% in August. Of the three Detroit automakers, only General Motors (GM, Financial) reported sales growth while Ford (F, Financial) and Chrysler (FCAU, Financial) reported sales declines.
But the automakers raised optimistic guidance anticipating replacement demand for flood-damaged cars and trucks after Hurricane Harvey in Houston. The count of the damaged vehicles is approximately 1 million.
Here’s a detailed analysis on the monthly performances of the automakers.
The Big Three
The top U.S. automaker, General Motors, said that it sold 275,552 vehicles in August, up 7.5% compared with August 2016. The sales gain was attributable to huge sales of brands such as Chevrolet (up 11.4% year over year) and GMC (up 12.4%). The company’s fleet sales surged 24%.
In contrast, Buick and Cadillac sales dropped 22.5% and 8.1%. The company said besides moving used cars to the flood-affected area Houston, it would offer a discount of $1,000 on new vehicles to customers. The Detroit automaker looks assured of bringing the inventories down to 850,000 or lower by the end of this year.
Source: www.goodcarbadcar.net
Ford’s August sales totaled 201,189 vehicles, down 2.1% year over year. The combined sales of pickups and vans spiked 9.3% which also included a 15% sales growth of F-Series pickups to 77,007 units. Combined sales of SUVs and crossovers tumbled 11.3% while car sales plunged 8.6%. The Blue Oval is the leading carmaker in the Houston area with a market share of 18%. Ford plans to shift used cars to Houston dealers and, at the same time, increase production of new vehicles to meet the demand.
Source: www.goodcarbadcar.net
Fiat Chrysler too witnessed a drop in sales, down 11% to 176,033 units. The company’s most popular brand, Jeep, suffered a 15.4% sales drop. Sales of all other brands such as Chrysler, Dodge, Ram and Fiat plunged 32.6%, 1.7%, 2.5% and 22.5%.
Performances of other automakers
The world’s largest automaker, Toyota (TM, Financial), sold 227,625 vehicles in August representing a 6.8% sales growth year over year. Toyota brand sales improved 8% while that of luxury brand Lexus was down a meager 0.4%. The combined sales of SUVs, crossovers and pickups increased 19.2%. In contrast, car sales plunged 7.2%. That did not have a major impact on the company’s monthly sales growth.
Nissan Motor (NSANY, Financial) sold 108,326 vehicles in August, down 13.1%. While sales of the Rogue crossover decreased 9.5%, the company’s namesake brand dropped a mammoth 14.8%. Honda Motor’s (HMC, Financial) sales, on the other hand, plummeted 2.4% on a year-over-year basis.
Last word
According to Kelly Blue Book, the U.S. auto industry looks set to cross the 17 million unit mark for the third straight year. The highlight for August continued to be the high margin SUVs and pickup trucks that sold in large numbers, suggesting a shift in customer preference.
Overall sales have slowed in 2017 compared with last year. In July, the Big Three suffered greater-than-expected declines in sales, while in August only General Motors saw growth. Analysts are now waiting to see the impact of Hurricane Harvey on Detroit automakers. Whether the hurricane will help the automakers lower inventory levels with massive replacement demand and stabilize vehicle prices remains to be seen.
Disclosure: I do not hold any position in the stocks mentioned in this article.
