Overall Industry/August 2016 US Auto Sales Comments From KBB.Com
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From Karl Brauer, senior analyst for Kelley Blue Book:
“After more than six years of steady growth, it's clear the auto industry has finally peaked. Nearly every large automaker suffered sales declines, even as incentive levels rose and truck/SUV sales remained relatively strong. While an end to the growth curve was inevitable, having it peak above 17 million units leaves little room for complaining among automotive CEOs. Now the automakers' focus will shift from simple growth to market share and managing inventories. The use of incentives and fleet sales as a counter to plateauing retail sales will be the statistics to watch going forward.”
From Rebecca Lindland, senior analyst for Kelley Blue Book:
“Sales in August were soft, as Cox Automotive predicted, but we are still in the midst of one of the highest sales years on record. Improving consumer confidence paired with jobs growth should mitigate some of the softening in sales through the rest of 2016. There will be great deals to be had as manufacturers sell off remaining model-year vehicles, so it’s very much a buyer’s market out there.”
From Jack R. Nerad, executive editorial director and executive market analyst for Kelley Blue Book: “The August sales results make it pretty obvious that auto sales this year are going to fall short of last year’s record sales number. Across the board, automakers are having to work harder and spend more to keep sales at an accelerated pace, and this past month, many just weren’t able or were unwilling to make the efforts that would send sales to a new record level.”
From Michael Harley, analyst for Kelley Blue Book:
“Warm summer days and low fuel prices couldn’t keep showroom momentum at record levels, as U.S. new-vehicle sales fell again, for the third time this year compared to last year’s record pace. The unimpressive news means that 2016 is unlikely to set a new industry high-water mark, despite many early predictions — August had the same number of sales days, but one fewer weekend this year. Automakers are still spending heavily on incentives, but many turned down the spigot in August. While that likely put fewer new cars in driveways, average transaction prices are creeping higher, which is good news to an industry that survives by selling vehicles with hefty discounts. Incentive spending is expected to remain consistent. Furthermore, don’t discount the upcoming Presidential election’s effect on car sales. Campaign spending on local TV channels pushes many automotive retailers ― heavyweight purchasers of discounted local TV spots ― off the air as the political race intensifies and fewer commercials means less showroom traffic. Worried consumers may also take a wait-and-see approach to buying a new car if the contest for the White House appears to be threatening the economy.”
From Akshay Anand, analyst for Kelley Blue Book:
“While 2016 has halted the growth we've seen the last several years, the reality is, we still might set or come close to another year of automotive records. The question for automakers now is how disciplined they will be in the balance for short-term sales versus long-term health.”
From James Grace, director of analytics product management for Dealer.com:
“Shopping on dealer websites was down 2 percent in August compared to a year ago, and only up 3.5 percent from July 2016, another indication that new-car sales may be plateauing. We are seeing trucks and SUVs continue to top consumer shopping lists.” (Dealer.com operates 62 percent of the nation’s franchise dealer websites. Like Kelley Blue Book and Autotrader, Dealer.com is a Cox Automotive company).
From Karl Brauer, senior analyst for Kelley Blue Book:
“Even with FCA's updated sales reporting method, the automaker managed to grow sales in a month when others struggled. The Jeep and Ram brands remain powerhouse divisions in the market, though even Dodge showed signs of life after sliding in recent years. FCA's incentive and fleet activity are clearly aiding the automaker in growing sales, but it is still growing.”
From Michelle Krebs, senior analyst for Autotrader:
“Fiat Chrysler’s August sales were up but not as much as expected, perhaps due to its new methods of how it counts sales. Aside from the usual strong performance from Jeep, Ram vans and Dodge performance cars, the new Chrysler Pacifica minivan appears to be off to a strong start.”
From Rebecca Lindland, senior analyst for Kelley Blue Book:
“FCA bucked the Detroit trend and saw increases in almost every model across the board, with the Jeep brand riding the truck and SUV wave, but Fiat and Alfa getting swamped in the riptide. When will a solution be found for these long-suffering dealers?”
From Akshay Anand, analyst for Kelley Blue Book:
“FCA had a strong August, and as usual, Jeep led the way. Dodge and Ram also displayed positive results, with healthy gains in Journey and Charger leading the way for Dodge. On the flip side, the Chrysler brand continues to struggle as consumers continue to shy away from sedans.”
From Michael Harley, analyst for Kelley Blue Book:
“Jeep continues to prove itself as FCA’s most valuable asset, posting a 12 percent sales increase in August as consumers embrace the Cherokee crossover. On the other end of the spectrum, Fiat and Alfa continue to struggle, despite efficient powertrains and incentives, dropping 21 percent and 62 percent, respectively — it appears that the Italian luster has worn off. The new Pacifica minivan, innovative and well-received, is leading the charge for Chrysler.”
From Rebecca Lindland, senior analyst for Kelley Blue Book:
“Consumers are responding to Cadillac’s new sedans, and shopping traffic is up 7 percent year-over-year on KBB.com, reflecting market conditions. But GM goes as Chevy goes, and with the brand’s sales down 3.9 percent, we see continuing weakness in the manufacturer overall. GM continues to exercise discipline related to fleet sales and incentive spend, so while sales are down, balance sheet health is improving.”
From Michelle Krebs, senior analyst for Autotrader:
“GM’s August sales mark the continuation of a journey the automaker embarked on some time ago, and it has remained steadfastly on track in reducing fleet sales, which were particularly low this year, keeping inventories in check and being disciplined in incentives. That’s a healthy formula for improving resale values and profit margins. However, it doesn’t grab positive headlines on sales day. The icing on the cake would be for GM to gain even more retail sales to boost its overall volume and share, which is no easy task. GM’s smaller trucks – the Chevrolet Colorado and GMC Canyon – are selling like gangbusters, as are competitors to the pair. With affordability for consumers being an issue, it appears these so-called small trucks are big enough, and buyers like their smaller price tags.”
From Karl Brauer, senior analyst for Kelley Blue Book:
“GM's focus on retail sales and reduction in fleet is paying off, with growing retail share and rising transaction prices. It's a brilliant strategy because the sales cycle has shifted, and simple volume growth is no longer realistic. But, if overall numbers are going to fall anyway, why not position yourself as maintaining, or even growing, retail sales. This is exactly what GM has done, and from a financial health perspective, the automaker is looking good in a market that appears to have peaked.”
From Michael Harley, analyst for Kelley Blue Book:
“Trucks, crossovers and SUVs were GM’s shining stars in August, despite overall sales dropping 5 percent from last year — August was not a good month for the industry as a whole. On a positive note, GM continues to show impressive restraint with regard to fleet sales and incentive spending, choosing to focus on a long-term strategy rather than dumping cars into the marketplace. Cadillac also appears to be resonating with luxury shoppers — sales of the premium brand were up nearly 4 percent.”
From Akshay Anand, analyst for Kelley Blue Book:
“GM's strategy to reduce fleet sales continues, though there were a couple of blips here and there from a retail perspective. The unwinding of fleet sales may be important from a longer term perspective, as the industry continues to show signs that the double-digit growth days are gone. With that said, as with the rest of the industry, many GM sedans continue to struggle.”
From Rebecca Lindland, senior analyst for Kelley Blue Book:
“Ford car sales decimated the company’s results this month, overshadowing an impressive 7 percent increase in Lincoln sales and leaving the manufacturer clinging to a 1.9 percent year-to-date improvement. This could have extended ramifications as the company is potentially left with more 2016s as the 2017 models roll in.”
From Karl Brauer, senior analyst for Kelley Blue Book:
“With nearly every Ford model down in August, and Ford's total sales slipping 8 percent, it appears even trucks and SUVs can't keep the sales charts moving up and to the right anymore. Ford did well with Lincoln and its van models last month, but these small wins couldn't offset an overall decline during one of the industry's traditionally hottest sales months.”
From Michelle Krebs, senior analyst for Autotrader:
“How else is there to say it? Ford’s August car sales were ugly. Ford car sales nosedived, while utilities and trucks flattened. The only bright spot was commercial vans and trucks, and a few Lincoln models. The question is, what is Ford going to do to turn this around?”
From Michael Harley, analyst for Kelley Blue Book:
“Ford leaned on Lincoln — good news for Matthew McConaughey, and his quirky commercials — and its Transit vans in August, as sales were up 7 percent and 17 percent, respectively, but it struggled with nearly every other vehicle in its lineup. Ford trucks, crossovers and SUVs continue to smother movement of its sedans and light cars, despite low fuel prices and aggressive incentives.”
From Akshay Anand, analyst for Kelley Blue Book:
“Ford had a rough go in August across the board, as it was down in sales for trucks, SUVs and cars. Its cars continue to be a drag on sales, as Ford needs to figure out a way to get its sedans and coupes back in the eye of the consumer.”
From Brian Moody, executive editor for Autotrader:
“I think shoppers are becoming more and more aware of which vehicles are simply carried over year to year and the ones that are truly new. The older Ford and Lincoln vehicles are not doing well – Fiesta, Focus, Explorer, C-MAX, MKS, Navigator and Taurus. For consumers, the best deals are likely to be sedans and hatchbacks. Cars like the 2016 Focus and 2016 Fusion are good, and with sales off in the 30 percent range, dealers will be willing to compromise.”
Volkswagen Comments
From Rebecca Lindland, senior analyst for Kelley Blue Book:
“I continue to be amazed and impressed at VW’s resiliency in the wake of the diesel matter. The dealers are clearly maximizing contact with every single buyer who walks through the doors. Sales were off 9 percent year-over-year and off about 13 percent year-to-date, which considering they cannot sell what used to account for 30 percent of sales, is truly incredible. In fact, were it not for TDI sales from last year, the brand would be up nearly 18 percent.”