Editor's note: The July incentive data table has been updated to remove incorrect June incentive data.
Paced by declines at Ford, Nissan, Honda, Toyota, General Motors and Hyundai-Kia, U.S. light-vehicle sales fell an estimated 3.7 percent in July as the auto industry lost some speed going into the second half of a year projected to be weaker than the robust first six months.
The seasonally adjusted, annualized rate of sales for July fell to 16.73 million, in line with the 16.7 million rate forecast by analysts polled by Bloomberg. It is the weakest SAAR reading since August 2017’s revised 16.58 million rate, when Hurricane Harvey disrupted sales.
U.S. light-vehicle sales have now climbed 1.1 percent this year through July. Overall, light truck demand rose 4.3 percent while car deliveries skidded 18 percent last month.
Among major companies, only Fiat Chrysler, the Volkswagen Group and posted gains, while Subaru of America extended its winning streak to 80 months.
The industry’s final sales tally for July is estimated because GM, the largest seller, now reports U.S. figures on a quarterly basis instead of monthly. GM’s U.S. sales fell 3 percent in July, Automotive News estimates.
At Ford Motor Co., strong sales of F-Series pickups couldn’t overcome flagging sales of passenger cars. Toyota Motor Corp. chalked up its biggest drop of 2018 with a 6 percent drop. Nissan Motor Co. deliveries declined for the fifth month this year as it continued to pull back from profit-eroding tactics to push sales. Kia outsold the Hyundai brand as both brands declined.
The tallies were in line with analysts’ forecasts of a soft July. Sales through June had been surprisingly strong – up 1.9 percent. But with most estimates pointing to total U.S. sales finishing below 17 million after a historic three-year run above that mark, something was due to give.
Automakers -- motivated by leaner inventories and strong light-truck demand -- also tempered incentive outlays in July, snapping a streak of monthly consecutive increases in average discounts that began nearly five years ago, J.D. Power data show. However, ALG and Autodata say average new-vehicle incentives rose last month vs. July 2017.
“July might indicate the market has finally taken the turn we’ve been expecting,” Charlie Chesbrough, senior economist at Cox Automotive, said in a statement.
There was one less selling day and one less weekend this past July than a year earlier.
The Bureau of Economic Analysis on Wednesday revised seasonal factors used to calculate the SAAR in recent years. The SAAR was 17.32 million in June and 16.79 million in July 2017, and topped 17 million every month this year until July.
Company by company
Another big month at Jeep and higher Ram demand helped FCA US post a 5.9 percent increase in July sales. Volume rose 15 percent to 79,906 at Jeep -- setting a July record for the brand -- and 2.2 percent at Ram. But sales skidded 45 percent at Fiat and 13 percent at Chrysler while dipping 0.5 percent at Dodge.
FCA said retail deliveries increased 6 percent to 153,925 while fleet shipments totaled 17,045. Fleet accounted for 10 percent of FCA's overall July volume, the company said. The automaker's U.S. sales have risen five straight months.
Ford Motor’s sales fell 3.3 percent as car demand slumped again and retail volume fell by double digits. July deliveries dipped 2.9 percent at the Ford division and 11 percent at Lincoln, the company said.
Overall, Ford truck sales rose 10 percent while car sales slid 28 percent and SUV and crossover demand dipped 1.5 percent. The company’s U.S. sales have now dropped four out of seven months this year, mostly behind a 16 percent decline in car sales.
Toyota Motor Corp. said deliveries slid 5.1 percent at the Toyota division and 12 percent at Lexus. It was the sixth straight decline for Lexus.
At Honda Motor, July volume dropped 8.2 percent, dragged down by a 19 percent decline in car sales. Deliveries fell 8.4 percent at the Honda division and 6.6 percent at Acura.
Nissan Motor Co. skidded 15 percent as the company continues to dial back on discounts and fleet volume. Sales were down 16 percent at Nissan and 10 percent at Infiniti. ALG estimates Nissan Motor's average incentive per new vehicle last month was $4,199, down 7.3 percent from July 2017.
Sales rose 6.7 percent at Subaru, 13 percent at the VW brand and 24 percent at Mitsubishi but slipped 2.4 percent at the Hyundai brand, 5.8 percent at Kia, 11 percent at Mazda and 2.3 percent at Mini.
Among other luxury brands, deliveries rose 24 percent at Volvo, 3.1 percent at Porsche, 2.1 percent at Audi and 0.1 percent at BMW. Volume dropped 20 percent at Mercedes and 63 percent at Genesis.
July 4 deals
Edmunds says demand rose in the first half of the month -- boosted by July 4 holiday deals -- before dropping in the second half.
Rising interest rates, slower U.S. economic growth, elevated gasoline prices and a rising supply of late-model used vehicles are expected to dampen second-half demand even as employment gains and consumer confidence remain strong.
First-half sales were also stronger than projected in part because of benefits from U.S. tax reform, analysts say.