Expectations of a sales increase met the realities of consumer economics in August.
Month-end sales in August 2017 were washed out by storms, like Hurricane Harvey which hit Texas on the 17th, and widespread flooding and industry watchers predicted that even a normal month would provide an improvement in 2018.
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However, rising interest rates and reduced incentive spending proved to be effective barriers to market growth.
The popular zero percent financing offers virtually vanished last month and even General Motors cut back on subsidies to buyers.
Even with the Labor Day weekend, US light vehicle sales were down by 0.2% or about 2,400 units to 1.48m cars and light trucks. The seasonally adjusted annualised rate (SAAR) came in at 16.78m units, an improvement over the 16.58 reading last August but was still the lowest SAAR of 2018.
General Motors may have taken the biggest hit of the major players. While it won’t release actual sales figures until the beginning of October, analyst estimates said sales were most likely down nearly 12.8%. Sales of cars and light trucks both missed their marks and estimated car deliveries plunged 35.4%.
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By GlobalDataFCA and Ford, which are both less car dependent than GM, finished the month in the black. FCA rode record sales of the Jeep Wrangler and Ram pickup to a 10% gain; Ford and Lincoln utilities bumped blue oval results up 4.1%. The F-Series pickup did its part as well, delivering 39.2% of total brand volume.
Toyota came up short as a 15.6% decline in passenger car sales wiped out growth in light trucks volume.
Even though Lexus sales were off 7.1%, it still managed to cruise to an easy monthly win in the premium segment. In year to date results, Mercedes has seen its once solid lead over BMW whittled down to a razor thin 58 vehicles.
Subaru reported an all time record month and Honda, Nissan and Mitsubishi came up winners, too. The Japanese automakers picked up some of the market share shed by the Detroit and European automakers.
The remaining points were collected by Hyundai and Kia. Both brands beat their August 2017 numbers due in large part to the addition of new crossover models to their lineups.
Despite a continuing rise in petrol prices, the American appetite for utilities remains strong. Crossovers and SUVs claimed 48.2% of total light vehicle sales in August coming ever closer to the share once held by passenger cars. Year to date share was 46.2% and it’s almost assured that utilities will own more than half the light vehicle market in the near future.
Jeep is still the king of the hill among utility brands; August Jeep brand sales were up 19.9%.
Car sales gave up 6.7 points of market share, falling to just 28.5% of the total.
Pickup sales were also strong, accounting for 17.8% of August deliveries. Sales of the Nissan Titan, Ram and Toyota Tundra full-size pickups all grew by more than 30%.
Despite the slip in August, year to date sales are still ahead of the first eight months of 2017.
But, absent another big incentive fueled push, sales in the next few months appear unlikely to be able to keep 2018 in the plus column. Post storm sales surged last September as damaged vehicles were replaced and October sales were down just slightly from the record setting 2016.
Full year results will depend on how carmakers balance profits and volume.
* indicates a sales record.
Note: Monthly sales figures for General Motors are estimates.
**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
