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September US auto slide even as discounts rise
[DETROIT] Major automakers reported lower September US sales on Monday despite high consumer discounts, as pickup truck volumes fell for both General Motors Co and Ford Motor Co.
With the top six US market leaders reporting, deliveries were down 0.6 per cent from a year earlier.
GM, the top-seller in the United States, showed sales down 0.6 per cent. Ford reported an 8 per cent drop, and Fiat Chrysler Automobiles was down 1 per cent.
Toyota Motor Corp showed a 1.5 per cent increase; Honda Motor Co, a decline of 0.1 per cent; and Nissan Motor Co, a 5 per cent rise.
While Ford said its F-Series pickup truck had its best month of 2016, sales were still down 3 per cent from a year earlier.
GM said pickup sales fell 15.5 per cent for its Chevrolet Silverado and 8.5 per cent for its GMC Sierra.
Spokesman Dan Flores said GM was holding tight reins on discounts, also called incentives, for Silverado and Sierra. It has 89 days of supply for those trucks, which he said put it in a good position heading into the fourth quarter, historically the strongest for pickups. "We will be building inventory in the next couple of months," said Flores. "This is an issue we monitor on a daily basis. We're not going to get into a discount war." FCA's Ram 1500 pickup truck showed a sales increase of 29 per cent.
Analysts were expecting September US industry auto sales to fall 0.8 per cent to 2.5 per cent, a poll by Reuters showed.
Most analysts forecast a decrease in 2016 from last year's record sales of nearly 17.5 million vehicles.
As the market shrinks, automakers are hiking incentives to entice consumers to spend. September industry incentive spending is tracking at an average US$3,923 per new vehicle sold, which would surpass the previous high of US$3,753 from December 2008.
In contrast to analysts' expectations, Toyota and GM executives said on Monday that a new record was within reach. "Industry sales in 2016 remain in line with last year's record levels," said Bill Fay, head of Toyota's US division.
GM Chief Economist Mustafa Mohatarem said this year's sales could reach or nearly match last year's and at least remain there for the next two years.
He said a major factor is consumer spending, which remains high and is outpacing the overall economy. "I don't see any downturn in the US economy any time soon," Mr Mohatarem said.