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Customer LoginsUS light-vehicle sales rise 0.7% y/y in July, up 1.3% during YTD, SAAR estimated at 17.8 mil. units
US light-vehicle volume sales moderated year on year (y/y) in July, which is expected to continue during the rest of the year. Light-vehicle sales rose 0.7% y/y in July and 1.3% y/y in the first seven months of 2016. The seasonally adjusted annualised rate (SAAR) of sales is estimated at 17.8 million units in July.
IHS Automotive perspective
- Significance: US light-vehicle (LV) sales were essentially flat in July, growing only 0.7% y/y. However, the seasonally adjusted annualised rate (SAAR) of sales is estimated at 17.8 million units, appreciably up from June's 16.7 million units.
- Implications: While conditions remain strong and indicate 2016 should be another record sales year, LV sales appear to be stuck in neutral. While some automakers' year-on-year volume sales show moderation, this is expected over the next few months, given the strong sales performances in the second half of 2015.
- Outlook: IHS Automotive estimates US LV SAAR sales in July at 17.8 million units, up notably from 16.7 million units in June and a welcome relief from the 17.2-million-unit average over the first half of 2016. Our LV sales volume projection for full-year 2016 is 17.5 million units, approximately 200,000 units lower than the forecast in June.
US light-vehicle (LV) sales were essentially flat in July, growing only 0.7% year on year (y/y). However, IHS Automotive estimates the seasonally adjusted annualised rate (SAAR) of sales at 17.8 million units, appreciably up from June's 16.7 million units.
Detroit automakers
General Motors' (GM) reduction of fleet sales in 2015 has carried on at an accelerated pace in 2016, with a target to reduce rental car sales this year by 80,000−90,000 units and achieve a fleet mix of about 20% throughout 2016 (this is a lower target than GM reported to IHS Automotive earlier this year). GM is also looking to operate with about 70 days' supply in most months. In January−July, GM reports its rental-fleet sales were down 38% compared with the first seven months of 2015. July's month-end inventory stood at 66 days, down from June's month-end inventory of 72 days. In July, GM reported total sales down 1.9% y/y. Buick's sales picked up in July, largely on the addition of the Envision, resulting in a 10.4% y/y gain and making the brand's year-to-date (YTD) results flat y/y. New products should drive a stronger second half for Buick. The decision to drop the Verano after a short 2017 model-year run will impact Buick's sales into 2017. Cadillac saw a gain of 1.3% y/y in July's sales. The XT5, which replaces the SRX, saw a healthy 4,951 units sold in July. Cadillac's car sales continue to shrink, though sport utility vehicle (SUV) sales are strong and the ATS had an atypically good month in July, with sales up 33.4%. Chevrolet's volume sales declined 5.3% y/y in July and the bow-tie brand's sales were down 4.6% y/y in the YTD. High-margin GMC sales saw an uptick of 4.8% in July, though they contracted by 2.5% y/y in the YTD. Some of this was the result of the changeover to an all-new Acadia.
Ford Motor Company has shown volatility so far in 2016, following a sales gain in June with a decline of 2.8% in July. The Ford brand saw sales slip 2.7% y/y in July but rise 3.2% in the YTD. Lincoln sales dropped 4.6% for the month and were up 10.1% in the YTD. Company-wide, car sales in July declined 9.3% y/y, utility vehicle sales dropped 5.6%, and truck sales gained 4.8%. Lincoln's improvement was in its car sales in July, which were up 3.0% compared with an 8.4% decline in utility vehicle sales. In the YTD, Lincoln SUV sales were up 19.2% and car sales declined 3.8%. All but the Mustang and low-volume Police Interceptor Sedan saw July sales declines on the Ford brand car side, including the Focus, with sales down 17.9% y/y. In SUVs, the Escape, Expedition, and Police Interceptor Utility saw sales gains, while the Edge and Explorer saw sales decline. In July, Ford vans contributed to truck sales gains, as the F-150 saw sales slip 1% and the Transit's sales gained 41%.
Fiat Chrysler Automobiles (FCA) US has adjusted its reporting methodology, including retroactively for the past six years. In July, it saw a sales gain of 0.3% y/y and a gain of 4.4% in the YTD (see United States: 27 July 2016: FCA confirms USD1.48-bil. investment in Michigan production plant, revises monthly sales reporting methodology). Under the new methodology, Jeep returned a 5.0% gain in July, Dodge a 10.1% decline, Chrysler a 4.1% decline, Fiat a 13.8% decline, and Ram a 4.9% increase. In July, FCA sold 44,069 trucks and light commercial vehicles (LCVs), 91,703 utility vehicles, and 44,955 cars and multipurpose vehicles (MPVs). Sales of utility vehicles gained only 0.9%, trucks and LCVs gained 4.9%, and cars and MPVs declined 4.7%. FCA has announced an intention to drop the Chrysler 200 and Dodge Dart, and the group will rely on trucks and SUVs for most of its North American sales. Fiat brand sales declined despite the new 124 Spider, which sold 480 units in July. The addition of the 500X has not improved sales of the Fiat brand, only cannibalised the first two offerings. At the Dodge brand, only the Caravan and Challenger showed increases. Sales of the all-new Pacifica reached a respectable 7,911 units. Between the three products, FCA sold 48% y/y more minivans in July.
Japanese automakers
Toyota's sales in the US have now declined three months running, falling 1.4% y/y in July. For the first seven months, Toyota sales were down 2.5% y/y. Toyota Division car sales dropped 7.8%. Camry, Prius, and Avalon saw declines, as well as Scion, in sell-down mode ahead of its relevant models being moved to the Toyota brand for the 2017 model year. Toyota Division truck sales were up 7.3% in July, while SUV sales were up 13.2% and pick-up sales down 1.8%. At Lexus, car sales dropped 15.2% and truck sales gained 2.0% in July, with all but the Lexus GX SUV gaining ground.
American Honda's sales gained 4.4% in July, pulling the company's sales up 5.1% in the YTD, and returning to outselling Nissan. Honda Division sales were up 5.9% at 139,125 units, while Acura sales fell 8.3% to 13,674 units. Honda's car lines again outperformed SUVs in July on volume, with a larger percentage gain on the truck side helped by the all-new Ridgeline. The Honda brand sold 70,607 cars and 68,518 trucks in July. However, the CR-V outsold the Civic in July, making it the best-selling Honda for the month. The all-new Civic remains Honda's best-seller in the year to date, however. The CR-V's demand gained 13.3%, though it faces a freshened Ford Escape and all-new Kia Sportage. Acura, which got 67% of its sales from the MDX and RDX, saw SUV sales drop 3.5% and car sales drop 17.0%.
Nissan Group saw sales pick up by 1.2% in July, losing fifth position to Honda. Nissan Division sales were up 1.7% and Infiniti sales were down 4.7%. Nissan Division car sales fell 8.9%, while truck sales were up 16.4%. Infiniti's QX50 saw sales slip in July, though is in the process of getting a new engine range. Infiniti's car sales dropped 33.9%, while SUV sales gained 23.3%.
Subaru claimed another record sales month, the 56th consecutive month of y/y growth, with a 3.1% gain. The BRZ, Forester, Impreza, and WRX saw sales decline. Though the company's recent years of double-digit rate growth have halted, Subaru outsold VW Group (excluding Porsche) in July and in the YTD. Mazda reported a sales gain in July of 2.8% y/y. Mazda sales have been impacted by having dropped the Mazda5 and the changeover to the all-new CX-9, though the CX-3 is additive volume compared with 2015. In July, sales of the Miata also slipped, less than a year after the sports car's launch.
Other automakers
Volkswagen (VW) Group (excluding Porsche, which had not reported at the time of writing) saw sales contract 3.8% in July. VW brand sales dropped 8.1% in July. Audi reported its 67th straight month of sales growth in July, up 4.0%. Combined sales for Hyundai (75,003 units, up 5.6%) and affiliate Kia (59,969 units, up 6.5%) showed a 6.0% y/y increase in July. Combined, the two outsold Nissan in the month, but not in the YTD.
Outlook and implications
Our estimate is that the light-vehicle seasonally adjusted annualised rate (SAAR) of sales in July will be 17.8 million units, according to IHS Automotive sales forecast analyst Chris Hopson, up notably from 16.7 million units in June and a welcome relief from the 17.2-million-unit average in the first half of 2016. Although incentives and fleet sales continue to rise and need to be monitored, both should help provide support to demand levels throughout the rest of the third quarter. Our light-vehicle sales volume projection for full-year 2016 is 17.5 million units (approximately 200,000 units lower than the June forecast). (At the time of writing, Porsche and Jaguar Land Rover have not posted monthly sales results.)
Light truck sales continued to bolster demand levels in July, accounting for over 61% of the month's volume, estimated to be the highest sector sales mix on record. There were 26 selling days this July, the same number as in July 2015. On a unit volume level, 1.52 million light vehicles were sold, an increase of 1.0% y/y. This results in a year-to-date sales volume of 10.2 million units, up 1.4% y/y. Monthly volume comparisons will become increasingly difficult over the next few months given the strong industry performances of a year ago.
Sales at the top three automakers faltered during July, while the rest of the industry picked up the slack. GM (down 1.9%), Ford (down 3.0%), and Toyota (down 1.4%) all realised lower volume compared with July 2015, forfeiting a collective 1.4 percentage points of market share. Honda (up 4.4%) and Hyundai-Kia (up 6.0%) led all manufacturers in sales growth for the month, while sales at FCA (up a slight 0.3% based on its adjusted figures) and Nissan (up 1.2%) continued to be supported by strong utility vehicle demand.
Light truck sales sustained their momentum during July, up 8.8%, while accounting for over 61% of the monthly volume, setting a new monthly mix record. Sales of MPVs and vans have grown substantially over the past few months, providing utility vehicles with additional support in bolstering light truck sector sales. This was at the expense of passenger car demand, sales of which were down over 9% in July.
Month-end vehicle stocks for the industry were down compared to the June levels, but strong third-quarter production schedules will likely start to increase stocks quickly. July month-end inventories for GM, Ford, and FCA were down compared to June's levels, with GM's stock being down approximately 24,400 units and Ford's inventory down 83,000 units.
About this article
The above article is from IHS Automotive Same-Day Analysis of automotive news, events and trends, and is a deliverable of the World Markets Automotive Service. The service averages thirty stories per day and also provides competitor and country intelligence. Get a free trial.