Motor Vehicles: Hotter weather means fewer car buyers in July


DETROIT >> U.S. auto sales wilted in July, as hot weather and softening demand kept many buyers at home.

Sales rose less than 1 percent over last July, to just over 1.5 million new cars and trucks, according to Autodata Corp. Sales were strong at the beginning of the month thanks to Independence Day promotions, but weakened after that, Kelley Blue Book senior analyst Alec Gutierrez said.

General Motors' sales fell 2 percent while Ford's U.S. sales fell 3 percent. Toyota's sales slipped 1 percent. Fiat Chrysler's sales were flat. Volkswagen's sales fell 8 percent.

Several automakers eked out sales increases. Hyundai's sales were up 6 percent and Honda's sales rose 4 percent. Nissan's were up 1 percent.

After six straight years of growth — and record sales of 17.5 million new vehicles last year— U.S. auto sales are beginning to plateau. In the first six months of last year, for example, sales were up 4 percent, or more than double the pace of this year.

High level should continue

Still, analysts say low gas prices, low interest rates, enticing new vehicles and strong consumer confidence should keep them at a very high level. If sales stayed at the same pace they were in July, they would reach 17.9 million this year, Autodata said.

"We're still at a healthy level as an industry," Ford's U.S. sales chief Mark LaNeve said Tuesday. "We'll adjust our plans according to the reality and temper our expectations somewhat."

Plateauing sales could be a good thing for consumers, since automakers are dialing up the discounts in order to hold on to their market share. TrueCar said industry incentives were up 5 percent over last July to an average of $3,225 per vehicle. Ford, Volkswagen, BMW and Fiat Chrysler had the biggest increases over last July, TrueCar said.

But incentives are a dangerous game for automakers, since they hurt profits and resale values and artificially inflate demand. Gutierrez said automakers are approaching a level of incentive spending last seen during the recession, and that's risky.

"The sky isn't falling just yet, but we are on an unhealthy path," he said.

General Motors Co. said its sales fell 2 percent to 267,258 vehicles. Chevrolet sales dropped but Cadillac, Buick and GMC all saw gains for the month. Sales of GM's best-seller, the Chevrolet Silverado pickup, were down 4 percent, but sales of the smaller Colorado pickup were up 27 percent.

Ford's sales fell 3 percent to 216,479. Sales were down for both its Ford and Lincoln brands. The Ford Escape SUV, a perennial best-seller, saw a 10 percent sales decline; Ford said inventories were low as it prepares to launch the revamped 2017 Escape. F-Series trucks sales were also down 1 percent as Ford prepares to launch a new Super Duty pickup.

Toyota's sales fell 1 percent to 214,233. Toyota division sales were flat but Lexus sales were down 6.5 percent. Toyota's SUVs, like the RAV4 and Highlander, saw double-digit percentage increases.


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