Cars and Drivers
Ford, GM Sales Fall in August
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The August U.S. sales posted by General Motors Co. (NYSE: GM) and Ford Motor Co. (NYSE: F) will fall, according to a carefully followed forecast. Total U.S. sales across the industry will rise 0.8% for the same period.
Ford and GM face another month in which their results will be dragged down by sales of their unpopular midsized and compact models. Ford has gone so far as to discontinue most of its car model lines in the United States.
Cox Automotive predicts GM sales will fall 7.5% to 255,000 in August from 275,552 in the same month a year ago. Ford sales are expected to slide 3.4% to 202,000 from 209,029 a year ago.
Two car companies are expected to do much better. Sales of Fiat Chrysler Automobiles N.V. (NYSE: FCAU) are expected to rise 10.8% to 195,000. Its Jeep and Ram divisions sell models that benefit from the trend of Americans attracted to sport utility vehicles, crossovers and pickups. Nissan, the third largest car company in Japan, is expected to announce an increase of sales to 115,000, up 6.2%.
Sales posted by the two larger Japanese manufacturers are expected to be lackluster. Toyota Motor Corp. (NYSE: TM) sales are expected to rise 1% to 230,000. It rarely does better than Ford, but August will be an exception. Sales for Honda Motor Co. Ltd (NYSE: HMC) are expected to fall 0.7% to 145,000.
Cox management commented on trends most likely to move the new vehicle market in the United States short-term:
• The August 2018 SAAR forecast of 16.8 million is up over the 16.5 million pace (recently revised up
from 16.0 million) in August 2017 and up modestly from last month’s 16.7 million pace.• Talk of tariffs and higher interest rates may be having some pull-ahead impact in the market. Auto
buyers, concerned about the increasing likelihood of higher vehicle prices over the course of the
year, may be buying sooner than they had originally planned, supporting a higher sales pace.• Although general buying conditions are strong, risks are also rising. Additional interest rate hikes
are expected later this year and a strong supply of off-lease vehicles is serving as a viable
alternative to new.
Among other things, this analysis shows that total new vehicles sales in the United States are cooling. GM and Ford are the largest victims now.
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