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US auto sales grow in July, with signs of slowdown
[CHICAGO] Automakers struggled to maintain US vehicle sales growth in July, with bigger players posting declines in a fresh sign that the industry's six-year boom may be slowing.
While overall sales in July inched up, according to estimates, General Motors's sales declined two per cent from a year ago and Toyota's declined 1.4 per cent.
Ford reported a three per cent decline.
"For the remainder of this year, we continue to see retail and industry sales strong," Ford's US marketing chief Mark LaNeve told analysts in a conference call.
"But potentially down versus record 2015 levels, and not as strong as we previously expected." Mr LaNeve said July 4 holiday promotions helped prop up industry sales for the month.
Overall about 1.52 million vehicles were sold last month, up 0.7 per cent from a year ago, according to Autodata.
The seasonally adjusted annual rate ticked up to 17.88 million units, compared with 17.59 million in July 2015, it said.
Barclay's economist Jesse Hurwitz said July sales beat the median consensus estimate of 17.3 million.
"The American consumer is, on balance, doing well," Mr Hurwitz told AFP, pointing to consumption growth and savings declines that suggest "households are feeling healthy overall."
FCA US, the American subsidiary of Italy-based Fiat Chrysler Automobiles which is facing a US federal probe of allegedly inflated sales numbers, managed to eke out a 0.3 per cent increase.
Honda sales were up 4.4 per cent and Nissan was up 1.2 per cent.
GM, the biggest US automaker, remained optimistic thanks to a five per cent year-over-year gain in retail sales as it shifts away from fleet sales.
"Low interest rates, full employment, stable fuel prices and increasing wages remain in place," said Mustafa Mohatarem, GM's chief economist, in a statement.
"These positive factors continue to point toward a strong second half of the year and another potential record year for the industry." Declines among some of the largest players suggested that six consecutive years of sales gains may be slowing.
Jessica Caldwell, a senior analyst at industry research firm Edmunds.com, said automakers are offering fewer financial incentives than they did a year ago, and that consumer demand on its own may not be sufficient for another record sales year.
"If automakers expect to outperform last year's record-breaking sales, they're going to have to lean more heavily on creating and promoting attractive financing offers to lure new buyers into showrooms," Ms Caldwell said.
The boom has been driven in part by pent-up demand as consumers waited to replace aging vehicles.
"The average age of the car in US roads is 10 years old. Trucks are something like 11," industry analyst Michelle Krebs of AutoTrader told AFP in an earlier interview. "That's the oldest fleet we've ever had."
With gasoline prices low, demand remained strong for fuel-guzzling sport-utility vehicles and trucks.
Honda, GM, Toyota and Nissan touted the popularity of their SUVs, while also reporting gains among cheaper sedans.
Many of GM's SUVs proved popular, from the Buick Enclave luxury SUV to the cheaper Chevrolet Traverse which sold twice as many units as the Enclave.
Moderately priced sedans such as the Chevrolet Cruze, Impala and Malibu suffered big sales declines. But the Spark, Chevrolet's subcompact car which starts at US$13,000, saw gains of 28.7 per cent year-over-year.
Toyota, the world's largest automaker, sold fewer pricey Camry, Prius and Avalon models and 4.9 per cent more of its cheaper Corolla cars. Consumers looking for SUVs flocked to the RAV4, which saw a 19.3 per cent sales bump.
Honda's competing SUV, the CR-V, set a monthly sales record, while its cheaper and redesigned Civic also proved popular. The company's luxury brand Acura posted declines.
At Nissan, its compact SUV Rogue was a big seller, as was its ultracompact and low-priced Versa sedan. Sales of its Infinity luxury brand declined.
Luxury carmaker BMW also posted a drop in sales, of five percent.
Volkswagen continued a precipitous sales drop as it tries to recover from its diesel emissions-cheating scandal. July US sales of VW vehicles fell 8.1 per cent year-over-year.