US car sales fall sharply in July
Major US car firms have reported a sharp fall in sales in sales in July, driven by lower rental fleet sales and weaker consumer demand.
Sales were down by 15% at General Motors, 10% at Fiat Chrysler and 7.5% at Ford compared with July 2016.
After several years of record growth, July looks set to become the fifth month in a row to see a fall in overall US car sales.
The fall comes amid weak in consumer income and spending growth in the US.
Consumer spending edged up by just 0.1% from May to June, while income growth was basically flat, the Bureau of Economic Analysis reported on Tuesday.
Mustafa Mohatarem, chief economist at General Motors, said he expected sales to improve in the coming months although they were unlikely to match last year’s record.
“Key US economic fundamentals remain supportive of strong vehicle sales,” he said in a statement.
“Under the current economic conditions, we anticipate the second half of 2017 will be much stronger than the first half.”
US car manufacturers have been deliberately scaling back sales to rental car companies, because they often bring them little in the way of profits.
It is that strategy that drove some of the steepest sales declines last month.
But the retail sector has also softened, despite strong demand for SUVs.
Overall US vehicle sales at four big firms – Ford, General Motors, Fiat Chrysler and Toyota – have fallen by between about 3% and 7% so far this year.
Ford expects retail sales across the industry to fall by about 6% for the year as a whole.
Ford vice president Mark LaNeve said he thought the figures were skewed by strong incentives some firms offered to families, which boosted sales last year.
“I don’t think it’s as bad as it looks,” he told analysts and reporters on Tuesday.
Shares in US car companies fell after the latest figures were released.
General Motors declined by 3.5% in morning trade, while Ford dropped 2.4%.
Toyota, which is listed on the stock exchange in Tokyo, saw its shares rise after its sales report showed it was one of the few companies to buck the trend last month.
The company sold 222,057 vehicles in July in the US, up 3.6% compared with the same time last year. The firm’s US sales are down 2.5% for the year so far.
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