Reuters reports GM Lowers Outlook for U.S. 2017 New Vehicle Sales, but not by enough in my estimation.
General Motors Co now expects U.S. new vehicle sales in 2017 will be in the “low 17 million” unit range, reflecting a widespread expectation that the industry is headed for a moderate downturn, a top executive said on Monday.
“The market is definitely slowing … it’s something we are going to monitor month to month,” Chief Financial Officer Chuck Stevens told analysts on a conference call. “Pricing is more challenging.”
U.S. new vehicle sales hit a record of 17.55 million units in 2016 after a boom that began in 2010. A glut of nearly-new used vehicles is expected to undermine sales this year. Major automakers have reported sales declines for the past three months.
GM had previously announced it expected 2017 new vehicle sales in the “mid-17 million” unit range. Stevens told analysts that sales could fall by 200,000 to 300,000 units this year but that the automaker had “somewhat insulated” itself from a downturn by reducing fleet sales, which lower vehicles’ residual values.
“We are going to remain disciplined from a go-to market perspective,” Stevens said.
He reiterated the company’s target to bring U.S. inventories of its vehicles down to 70 days’ supply by December from 110 days in June.
Reduced Consumer Sales, Reduced Fleet Sales, Reduced Inventories
If sales are down, then reducing inventory-to-sales ratios will require even less production. Durable goods reports do not show that happening.
Questionable Details
This morning I posted Durable Goods: Another Bad Report, Diving Into Questionable Details.
Shipments were supposedly up a total of 1.8% in April-May period. New Orders were supposedly up 1.7% in the same timeframe.
Let’s match this up with auto sales.
- June 1: Motor Vehicle Sales Flat, Hope Turns to Second Half: What About Fleet Sales? Incentives?
- May 2: Auto Sales Puke Again: Year-Over-Year Totals: GM -6%, Ford -7.2%, Toyota -4.4%, Fiat-Chrysler -7.0%
- April 3: Auto Sales Final Numbers: Down 5.7%, Two-Year Low; Don’t Worry, It’s Just a Plateau!
This morning I asked: “Are the auto manufacturers planning a big June and July? If so, why? Revisions anyone?”
This afternoon we see GM is not planning a big June or July. I suppose one could happen anyway, but then what about the guidance?
And what about GM’s comment “Pricing is more challenging”? What will that do to the value of inventories on dealer lots?
Mike “Mish” Shedlock
Meanwhile, SCOTUS partially reinstates Trump travel restrictions, will hear the case in the fall…https://www.nytimes.com/2017/06/26/us/politics/supreme-court-trump-travel-ban-case.html
I guess if you ban the guys with the oil from flying, that may, in some twisted way, be bullish for cars…..
Cars and trucks are overpriced with backup cameras, Internet ready,, etc. None of that is needed to drive a vehicle. The average American can not afford $46000 jeep Cherokee or $50000 Ford F-150. They are pricing themselves out of the market.
Auto electronics are planned obsolescence. I wouldn’t have one without a complete set of spare electrics including the instrument panel display. Good quality semiconductors start to burn out after 15 years. GM quality is not that good.
None of those electronics are repairable either…. All boards are surface mount components.
On Board Cameras are mandatory by the feds. so much stuff has become mandatory this is how cost has become out of control
Backup cameras are great. Much safer than the old way.
Umm, the old way is to look over your shoulder.
Kinda like the Federal Reserve, looking out the rearview mirror while going forward.
TOUCHE!
RE: “Cars and trucks are overpriced with backup cameras, Internet ready,, etc. None of that is needed to drive a vehicle…..”
Auto Pushers are doing the same “full tricking out” of vehicles as home builders did – all for only one goal of pushing their profits as high as possible.
Give me a BIG, extremely reliable vehicle – and I’ll give up power windows, power locks, automatic trunk release, etc. etc. etc. Besides all that extra crap weighs down the auto and ruins it’s MPG.
My son brought a 2006 Chevy Cobalt beater for his daily work driver. When I scanned it for his check engine problem, only one code showed for the reason the light was on. There was around 12 other codes, all for problems that were not in this car. Codes for power windows, electric door locks, electric seat issues. Only problem was vehicle had manual roll up and down windows with crank, manual door locks and manual seats.
Which car enthusiast really cares about US metal.?? Get me a cheap BMW M3 or even better a Porsche at a bargain price any day LOL. Sorry Mr President – no support from this car buyer!
That. I just picked up a sweet 2008 BMW z4 coupe (rare non-convertible) with 40K on it for 1/3 of new price. Hella fun, but the vintage “state of the art” nav system is just sad.
GM seeking 3 billion dollars in debt to inject into its retirement fund.
So umm …what would be a reasonable ROI on money borrowed to invest in feeble old people eeking out a few more years above ground?
this is exactly how they went bankrupt last time. Grab your popcorn
GM always a day late and a dollar short.
Ford starting reducing output 9 months ago.
I’ve noticed something strange. I eat lunch early. Like 10-11 AM. Whenever I go to a local shopping center to get food, I see a lot of parked new GM SUVs with black ladies in them with the engine running and them talking on the phone. Any idea what’s going on?
There’s not a politically correct answer to your question.
Yeah. Those are Yellen’s advisors!
likely government workers in no show jobs