July may have started off with a bang as Americans celebrated the 4 July Independence Day holiday but it ended with a jolt as US light vehicles sales tumbled 6.9%, falling more than 105,000 vehicles to 1,416,743 cars, crossovers and light trucks.
The year to date (YTD) deficit rose from 2.1% to 2.9% in a single month as the January-July total fell by more than 290,000 to slightly less than 9.9m.
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The seasonally adjusted sales rate (SAAR) tumbled, as well. July’s reading of 16.77m was 1.06m lower than the same time a year ago.
For once, the Detroit Three weren’t the biggest losers. That honour went to the Koreans as the combined volumes of Hyundai and Kia dropped 18.2% behind a 27.9% plunge in Hyundai deliveries.
But Detroit automakers were not far behind as General Motors sales fell 15.4%; FCA gave up 10.5% and Ford shed 7.4%. Declining fleet deliveries are to blame for much of the shortfall. FCA reported just 10% of its July volume went to daily rental, commercial and government business. Ford, which depends on commercial and government fleet sales for a significant percentage of its sales volume, said its fleet sales were down 26.4%.
While Ford and GM consider cutting their full size cars, like the Impala and Taurus, FCA’s Chrysler 300 and Dodge Charger are doing well. The big, rear wheel drive sedans that date back to 2005 have given FCA a big lead in the niche, coming in just 20 units shy of GM’s combined Cadillac and Chevrolet models. Back in the heyday of the big American sedan [1m sales of the Impala nameplate alone in 1965 – ed], no one would have believed that a Chrysler would outsell a full size Chevy.
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By GlobalDataThe Japanese automakers got a big boost from Toyota whose deliveries increased 3.6%. Toyota enjoyed strong utility sales, outselling all other automakers for the month. Toyota brand crossovers and SUVs supplanted Jeep at the top of the heap though Jeep still holds a solid lead for the segment in YTD sales.
Minivans and MPVs took a big hit in July. Sales were down 17.7%, led by a 25.5% decline in deliveries of the Dodge Caravan. Turnover of the Chrysler Pacifica rose 4.9% slightly but it couldn’t overcome a nearly 11,500 unit deficit.
Utilities, including crossovers and SUVs, were about the only volume winners in July. Sales rose 0.9% as they claimed another 3.3% of the market. Last month the segment accounted for 42.9% of total new vehicle sales.
Pickups gained a point of share but the credit goes to mid size trucks which gained 3.8%. Sales of the big pickups dropped about 2.2% and total segment sales were down 1.1%. Commercial van turnover dropped like a rock in July as sales of the segment leading Ford Transit fell off a cliff. Transit deliveries were down 67.3% as buyers opted for smaller vans. The sole outliers among the larger vans were the more traditionally styled Chevrolet Express and GMC Savanna.
Even with July’s unexpected drop, it still looks like a fairly soft landing this year. But one factor which could have a big effect on sales is financing. Banks are seeing an increase in delinquencies and are getting more selective about borrowers. This means consumers with less than stellar credit will have a harder time getting a new vehicle loan. A fair percentage of new vehicle sales in the US in recent years has been to customers with sub-prime ratings and it is likely that some of that business will have to be turned over to the used car dealers.
* indicates a sales record.
**Volkswagen Group figures include Audi, Bentley, Porsche and Volkswagen brands
Other includes estimated sales for Aston-Martin, Ferrari, Lamborghini, Lotus, McLaren, Rolls-Royce and Tesla
