October US sales fall as auto boom slows
DETROIT (AP) — It’s a chilly autumn for U.S. auto sales.
Sales of new cars and trucks fell an estimated 4 percent in October as consumer demand waned, according to Autodata Corp.
Hyundai and Subaru both reported 4-percent sales increases from last October. But General Motors’ sales fell 2 percent, Toyota’s sales were down 9 percent and Fiat Chrysler’s sales dropped 10 percent. Honda’s sales fell 4 percent and Nissan’s were down 2 percent. Volkswagen’s sales fell 18.5 percent.
Ford Motor Co. said its sales figures would be delayed until later in the week due to an electrical fire at its headquarters that stopped dealers from reporting sales. Autodata estimated Ford’s sales fell 2 percent
U.S. auto sales remain near their all-time highs, but after six years of growth following the Great Recession, they’re tapering off. October was the fifth month of year-over-year sales drops in 2016, a sign this year could fall short of last year’s U.S. record of 17.5 million sales.
“The fact that retail sales are beginning to contract despite high incentives and extremely low interest rates and gas prices is a clear indicator that this cycle has reached its peak,” said John Humphrey, senior vice president of J.D. Power’s global automotive practice.
Sales fell even though automakers increased average discounts per vehicle by 12 percent to $3,726 per vehicle, according to J.D. Power. But the average sales price still was expected to set an October record at $31,383. Prices are rising because more higher-priced trucks and SUVs are being sold.
Incentives can draw buyers in the short term, but they can be dangerous for the industry, since they lower profits and hurt vehicles’ resale values. Kelley Blue Book senior analyst Alec Gutierrez said incentives are currently growing faster than average prices; if that trend continues, or if prices stagnate but incentives keep growing, there could be trouble for manufacturers.
“We’re on the upper end of the spectrum in terms of where we would feel comfortable,” he said.
Gutierrez and others say they expect automakers to cut production in the coming weeks in order to keep vehicle supplies aligned with demand. Ford already cut production at four North American plants in October, including those that make the Fusion sedan, Escape SUV and F-150 pickup.
— General Motors Co. said its U.S. sales fell 1.7 percent to 259,000 last month. All brands but Buick reported declines. Sales of its top-selling Chevrolet Silverado pickup fell nearly 4 percent but Chevrolet Tahoe SUV sales rose 81 percent while GMC Acadia SUV sales were up 24 percent. GM reported that it’s getting strong prices for its vehicles; its average sale price of $43,988 was a record for October.
—Toyota Motor Corp.’s sales fell 8.7 percent to 186,295. Toyota brand sales were down 9 percent, while luxury Lexus sales fell 6 percent. Sales of the Tacoma small pickup rose 4 percent and Lexus SUV sales jumped 6 percent. But car sales tumbled. Sales of the Prius hybrid were down 46.5 percent despite a recent redesign.
— Fiat Chrysler Automobiles said its sales fell 10 percent to 176,609. Jeep, Chrysler, Dodge, Alfa and Fiat sales were down, but Ram sales were up 12 percent on strong sales of its commercial vans.
— Honda Motor Co.’s sales fell 4.2 percent to 126,161. Sales of the Honda HR-V small SUV jumped 46.5 percent, while sales of the luxury Acura MDX SUV were up 15 percent. But car sales dropped.
— Nissan Motor Co.’s sales fell 2.2 percent to 113,520. Sales of the newly redesigned Nissan Armada SUV jumped 79 percent, while sales of the Murano SUV doubled from last year. But Infiniti luxury sales were flat, and Nissan and Infiniti’s combined car sales were down 13 percent.
—Hyundai Motor Co.’s sales were up 4.1 percent to 62,505. Hyundai’s new luxury brand, Genesis, sold 1,201 vehicles; the Hyundai Tucson SUV also saw an 11-percent increase in sales.
—Subaru brand sales rose 4.1 percent to 53,760 on strong sales of the Outback SUV — which was up 22 percent — and the Crosstrek wagon.
— The Volkswagen brand, still recovering from its diesel cheating scandal, said sales fell 18.5 percent to 24,779. Sales of the newly redesigned Beetle were up 29.5 percent, but most vehicles saw sales declines.