U.S. sales at FCA US and Hyundai rose on higher light truck volume as Americans continue to snap up pickups, SUVs and crossovers. Toyota Motor Corp. and Nissan Motor Co. posted lower sales on weaker car and truck volume.
Sales at FCA, behind a 45 percent surge in Ram brand volume, rose 2 percent last month. Ram pickup deliveries jumped 56 percent to just over 68,000, enough to help the truck outsell Chevrolet's Silverado and solidify its standing as the No. 2 large pickup in the first half of the year.
Volume dropped 12 percent at Jeep, 4 percent at Chrysler, 17 percent at Dodge, 35 percent at Fiat and 29 percent at Alfa Romeo. Jeep, one of the hottest brands last year with a U.S. sales gain of 18 percent, has seen deliveries fall every month this year.
FCA said fleet sales totaled 49,495 last month and represented 24 percent of total volume.
Toyota's June sales dropped 3.5 percent, with volume down 3.5 percent at Toyota and 3 percent at Lexus. At Nissan, deliveries skidded 15 percent behind a 15 percent drop at the Nissan brand and an 8 percent slide at Infiniti.
Hyundai's June U.S. sales rose 1.5 percent behind higher retail and strong crossover demand. Hyundai said three crossovers --- Santa Fe, Tuscon and Kona -- posted double digit gains in retail volume, helping give the brand its 11th straight monthly increase.
June also marked the sales debut of the Palisade, Hyundai's large three-row crossover, and volume totaled 383 units.Overall, Hyundai's light truck sales rose 10 percent last month.
Hyundai, like other automakers, continues to post weaker car sales, with the Sonata and Elantra both down for the month and year.
Higher crossover deliveries also helped Mitsubishi Motors to a nearly 11 percent gain in June volume.
Industry outlook
Most automakers will report June results later today, and total U.S. light-vehicle sales are forecast to drop as retail and car demand continues to weaken across the industry. Ford Motor Co. plans to report results on Wednesday.
General Motors, which no longer reports monthly sales, said second-quarter U.S. deliveries dropped 1.5 percent, with gains at GMC, Buick and Cadillac offset by weaker results at Chevrolet. For the year, GM sales are off 4.2 percent.
The overall market remains strong with the seasonally adjusted, annualized rate of sales expected to drop to 17 million in June, based on a survey of 11 analysts by Bloomberg, down from 17.4 million in May and 17.32 million in June 2018.
GM said Tuesday it expects the first-half SAAR to come in at 17 million.
U.S. sales fell 0.3 percent in May and 2.4 percent in the first five months. Some analysts see a second-half bounce from the launch of new and redesigned light trucks, as well as a possible interest rate cut from the Federal Reserve.
Strong consumer confidence, steady economic growth and employment gains, and relatively low gasoline prices continue to support new light-vehicle demand though affordability is increasingly weighing on the market, analysts say.
Automakers are also getting a boost from higher commercial and rental agency business. J.D. Power and LMC expect fleet sales to rise 3.9 percent in June, and Cox Automotive says fleet deliveries are on track to set an annual record in 2019.
“Auto demand was better than anticipated in the first half and we expect strong performance in the second half of the year. If the Fed cuts rates, as widely expected, lower financing costs will provide further support to auto sales,” GM Chief Economist Elaine Buckberg said.
Automakers
Among major automakers, only Subaru, Hyundai Group and Volkswagen Group were expected by most analysts polled by Bloomberg to post a gain. Volume was forecast to drop 4.8 percent at General Motors, 6.8 percent at Ford Motor, 1 percent at FCA US, 3.3 percent at Toyota, 5.3 percent at Honda and 10 percent at Nissan.
Incentives
Automakers remain disciplined on discounts, with first-half incentives averaging $3,788 per unit, down $130 from the first six months of 2018, J.D. Power said. The average first-half discount on new cars fell $304 to $3,588, while average spiffs on light trucks dropped $65 to $3,871. In June, average incentives fell 1 percent, or $37, to $3,747 compared to June 2018, ALG estimates, but rose 0.4 percent, or $16, from May 2019. The Detroit 3 continue to offer the highest discounts among major automakers, through Honda and Toyota raised incentives, ALG data show. (See chart below.)
Odds, ends
- There were 26 selling days last month vs. 27 in June 2018.
- Days to turn, the average number of days a new vehicle sits on a dealer lot before being sold to a retail customer, was 75 days through June 23, up 6 days from June 2018, J.D. Power said.
- The average new-vehicle retail transaction price in June was tracking at $33,665, up from $32,074 in June 2018, J.D. Power said. ALG estimates the average transaction price rose 3.1 percent, or $1,014, to $34,036 in June.
- Incentives, as a percentage of average transaction price, are expected to be 11 percent, down 3.9 percent from a year ago and up 0.6 percent from May 2019, ALG said.
- The average interest rate on a new-vehicle loan dropped in June for the second month in a row, hitting its lowest level so far this year. Edmunds said the annual percentage rate on new financed vehicles averaged 6 percent in June, compared to 6.1 percent in May. And more shoppers received interest rates between 2 to 5 percent in June compared to any other month so far in 2019, Edmunds said.
Quotable
“Despite all of the external noise, the beat goes on! A much more dovish Fed is under pressure and is now expected to make a series of interest rate cuts. This will provide support for auto sales in the second half of the year and help offset rising vehicle prices and the current level of incentives.”
-- Jeff Schuster, head of global vehicle forecasts for LMC Automotive
““Transaction price growth accelerated in June, climbing 3 percent as demand for trucks and SUVs pushed sales and prices up in those segments. Overall, SUV prices were up 4 percent, and trucks rose 3 percent, while car prices were flat (and still lost market share). Luxury and mainstream midsize SUVs are showing the most strength right now, with brand new models such as the BMW X7 and Kia Telluride driving incremental sales and price growth for their brands.”
-- Kelley Blue Book analyst Tim Fleming
“The summer selldown is officially in full swing, and car shoppers are finally starting to find the price breaks they’ve been hoping for. While we’re not talking about the dramatic discounts you could find just a few years ago, it’s clear automakers are realizing if they want to sell new cars at record-high prices, they’re going to have to do something to entice the average consumer.”
-- Jessica Caldwell, executive director of industry analysis at Edmunds
