Nearly every company performed worse than expected, and expectations were down across the board.
- 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.”
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.”
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