Auto sales are down for the fourth consecutive month. Final numbers are not yet in, but the preliminary year-over-year totals are miserable.
Nearly every company performed worse than expected, and expectations were down across the board.
Reuters reports Automakers’ April U.S. Sales Drop; Wall St. Fears Boom is Over.
- GM, the No. 1 U.S. automaker, reported a 6% decline in April sales to 244,406 vehicles.
- Ford, the No. 2 U.S. automaker, reported a 7.2% decline in April. Ford car sales dropped 21% and trucks declined 4.2%, while SUV sales rose 1.2%.
- Toyota reported a drop of 4.4%. Lexus sales slid 11.1%. U.S. car sales at the Japanese automaker were down 10.4%, while truck sales were up 2.1%.
- Fiat-Chrysler reported sales were off 7%
“GM said its consumer discounts were equivalent to 11.7 percent of the transaction price. The automaker also said its inventory level rose to 100 days of supply at the end of April versus around 70 days at the end of 2016. Recent levels have worried analysts, and GM has promised inventories will be down by the end of 2017.”
Bloomberg reports Auto Sales Fall for Fourth Straight Month
Quote of the Day
The U.S. market is plateauing, Mark LaNeve, Ford’s vice president of U.S. marketing, sales and service, said on a call with analysts and reporters.
“I’m not discouraged by the number,” he said. “In this kind of industry, there’s going to be these kinds of months.”
I discussed complacency yesterday in Three Big Red Flags for Auto Sales.
The three red flags according to Automotive News are leasing, incentives, and inventory. I added a fourth: complacency in the face of falling demand and rising incentives.
Effect on GDP
Auto sales make up about 20% of consumer spending. The big second quarter GDP bounce economists expect is highly unlikely, to say the least.
Mike “Mish” Shedlock
john clark said:
Where seldom is heard a discouraging word,
And the skies are not cloudy all day.
Robert J Barnes said:
Surprising that VW/Audi up even with negative publicity of Dieselgate.
Sales rebounding from last year’s losses as a result of the diesel scandal that was first reported in September of 2015. Sales dropped more than 10% for 2016.
So many bubbles
So much debt
So much future demand brought forward
So many bailouts
So much cheap money
It will end in ruin, misery, bankruptcy and wa
Victor Adam Smith said:
Add a fifth…..
Old design product – that’s often badly designed………
I had to laugh when I saw a Chevrolet commercial talking about their quality awards.
I wondered whether Chevy had become like the public schools, where the passing score is lowered from 75 to 60 to cover up the high failure rate.
Some decline might be what’s on offer. Cars are now extremely very boring, they just mostly all work the same and last longer than they used to. I’m trying hard to find a reason to change mine.
Medex Man said:
After market repair parts are often better than OEM parts, especially when looking at fuel efficiency, wear and tear, etc.
The OEM parts were designed by the sales department to meet a price point. The after market parts have to compete on better performance. And they are often better on price too. Once your OEM warranty expires, after market parts are the obvious choice
Repairing your “old” car with after market parts is almost always better, especially since it doesn’t result in higher property taxes that a “new” car entails
A lot to be said for that. These guys are a great source to keep the old jitneys going. In most cases they offer a several choices of suppliers.
That’s the truth. They all look alike and are not very appealing. Also they last so much longer. There is not overreaching reason to buy another car. Maybe that is what they think auto drive cars will be, the next big thing.
Said exactly that to someone recently. Never saw so many cars that not only look the same but all have the most boring designs. Even worse is that it is hard to differentiate between several high end cars and hyundais.
Finally, something we agree on.
I guess the machines that stamp the bodywork are universally available now, a lot of makes share design but add tweaks… gone are the days when styling was in house and actually carried an artistic appeal, we are now in some kind of competition to see who can create the ultimate convergence.
In the late 80’s component design reached a stage where components could be made that lasted an acceptable time without service, but only to be binned and replaced with new at that point, not repaired. So autos are pretty much modular nowadays, with less of simple mechanics but easier repair… but sometimes much more costly when it is a complex part. Most modern cars are little more than say changing washing machine out of a choice that are all pretty much the same, work well, but are really not that appealing in any other way.
I disagree.. we agreed Portugal is in the 1500’s.. ora pois pois!
Pois não, except that was not exactly what we agreed on.
Consider it this way. All the expansion into Europe, from paleolithic times, was east to west. Later, this became east west and north south. The iberian population was celticized, as was central and western Europe, from the east The Cartheginians, the Romans, pushed in from the east, the Alans also, the Visigoths and Vandals started from the northern Scandinavian and Germanic enclaves, again the Moors ( mostly Muslimized berbers partly related to the previous Iberians) from the east, then the gothic remnant hierarchy from the north, along with Frankish nobility. Most all of these invasions would have pushed the traditional populations into Portugal, from where they always fought, and fought hard. Most of these invading forces only were a small minority compared to the native population. So what you have is remains of the history of much of Europe, its weaker limits, pressuring ancient natives and surrounding natives, into this region, but never being able to disperse them fully, as the Atlantic was the last frontier.
The 1500s was the time of Portuguese exploration, where finally these people headed out into the world as a nation, with all of its adventure and reward, its learning, its successes and failures.
So I think that the depth of sentiment stretches back to well before the more recent voyages and modern history, those just form a fully integral layer to it.
I know, but those were good times for that country. Exploration, colonization, slave trade. The reis were flowing.
Odd, I responded before you did but somehow it came up after and still seemed in context. Your posts are much more interesting when they are not about some binary magical infinity inflation occurring at zero interest rates.
I’ll probably be in Portugal in late June, now I’ll think about it a bit differently. (unless I somehow get called for my Wimbledon lottery – looking extremely doubtful right now)
Tony Bennett said:
Big Old Miss
16.8 million SAAR actual
17.1 million SAAR forecast per Wards
Medex Man said:
Meanwhile, electric cars built way back in 1909 have battery life and performance very close to “modern” electric cars. Here is a 2007 article from NY Times about Jay Leno’s 1909 Baker
Note the car doesn’t benefit from aerodynamics or modern gears / transmissions, but power output matches modern electric cars.
Alternate View said:
Obviously, everyone is buying Teslas and lining up around the block for financing. No wonder TSLA is to the sky.
Medex Man said:
Tesla did “amazing” things with the surplus GM factory they got cheap from GM’s most recent government bailout. But once Tesla had exploited that hand-out, they can’t produce the volume that Hollywood stars / starlets want.
And as Kevin OLeary recently pointed out… Tesla is just another car company with a flashy salesman at the helm. Tesla is trying to do some quiet recalls for defective parts (just like any other car manufacturer). Musk has been forced (by his own lawyers) to call the driver assist system what it is (it is NOT self driving). And its very doubtful Tesla will have any advantage over Chinese battery manufacturers, despite Musk’s hype… many of the rare earth materials in the batteries come from China.
Tesla is the new Delorean. It isn’t selling anything close to enough to make it a viable business. If they are lucky, they might (far from certain) transform from Delorean to Ferrari (very high price / low volume). Without massive taxpayer subsidies, its not clear that Musk can deliver.
If Musk gets subsidies, how does the US government prevent China from doing the same? And why not GM and Ford? And Honda and Toyota factories that are located in the US? And BMW too?
And if a billionaire like Musk gets subsidies, what about every other business in the country? From a government that is running trillion dollar spending deficits and already has out of control debt…
the cure for declining auto sales… 108 month loans. (cars last how long?)
Nick Leeds (@917NickL300) said:
People usually keep a new car two or three years and then ‘roll the loan’ into the new one.. You know like with 30 year & 15 year fixed rate mortgages.. Very few people stay in the same home for 15 years let alone 30
Italy has just loaned Alitalia some $650,000,000 to scrape along until they are put out of their misery by an acquirer.
There a joke in there somewhere. Alitalia had a problem competing with budget airlines. Italy can’t compete with Germany.
Who cares about GM numbers?
How is Porsche doing – I like to pick up a bargain 911 🙂
Porsche overall sales new record – too bad
BUT 911 minus 8%
there is always hope LOL
Automobiles make up 25% of the economy. These numbers could push GDP negative.
Dick Jones OCP said:
New auto sales would surge if the process of buying an automobile weren’t so miserable thanks to the organized crime outfit aka the dealership model that must be dealt with in order to acquire a new auto. Why can’t I just order a car at wholesale price from the manufacturer or Amazon? Because the scumbag auto dealers have bought off our politicians to make such a transaction illegal. Disgusting.
Motor vehicles are too expensive. Auto inflation is to the moon. How can people afford them?
Nick Leeds (@917NickL300) said:
I wonder the same thing especially in cities like NYC & Boston with decent public transportation where average rent is well over $2,000 a month. How do all these fresh faced twenty somethings afford new Acuras, Acuras & loaded Jeep Cherokees when the average rent even for a one bedroom apartment anywhere in the greater Boston area is over $2,000 a month alone plus add in student loans and the five figures of credit card debt mostly everyone has these days. Likely the answer is that Mommy & Daddy make the full car payment plus the amount for insurance and a covered parking spot