GM, Ford US Auto Sales Tumble In "Bellwether" Month Of May

Tyler Durden's picture

You can't say we weren't warned. As reported over a month ago, the biggest drag on recent consumer spending was auto sales. 

 

And this is happening as Automaker inventories are at their second highest in 23 years. If sales are collapsing, then the violent spike in relative inventories as seen in 2008 is not far away.

 

 

One month later, this is finally starting to materialize in the OEM numbers, when earlier today both GM and Ford's US vehicle sales fell more than analysts had estimated in May. According to Bloomberg this "raises questions about stalling consumer demand."

Not really: as we also warned a month ago when looking at stalling use car price changes, it was only a matter of time before the lack of demand for every low priced autos spilled over to new car sales, which it now has.

 

GM sales plunged 18 percent, missing estimates for a 13 percent drop, with all four brands reporting declines of at least 14 percent. Ford’s light-vehicle sales slid 6.1 percent, according to Bloomberg, compared with an average estimate for a 4.9 percent decline. GM projects a sales pace for the month that is slower than analysts had predicted. GM said retail sales fell 13 percent and it continued to pull back on deliveries to rental-car fleets. The largest U.S. automaker said it sold 22,000 fewer rental cars in the month, the biggest reduction in the past two years. 

Sales of Ford and Lincoln passenger cars plunged 25 percent, led by a 37 percent slide for the Taurus sedan, once the company’s flagship. Even the redesigned Mustang saw its momentum fade as deliveries dropped 24 percent. Sales of the recently restyled Ford Edge sport utility vehicle fell 14 percent. F-Series truck sales rose 9 percent and van sales had their best May since 1978 on the strength of a 16 percent gain by the full-size Transit.

To be sure, all of the six largest carmakers were estimated to report declines for May, but the severity of the drop has taken many by surprise. As Bloomberg notes, "even as auto sales gained in April and the U.S. consumer continues to spend, there have been signs of wavering economic confidence, and the industry may struggle to maintain its record pace. As a kickoff into summer on the back of Memorial Day weekend promotions, May is a bellwether for gauging buyer appetite."

May deliveries “are set to fall year-over-year with two fewer selling days combined with retail demand that is holding steady, but not growing,” Tim Fleming, an analyst at Kelley Blue Book said in a statement before the monthly results.

And the spin from Fleming: “While this year may not bring the growth the industry has become accustomed to, it is important to remember that sales are still at record levels.” Yes, but they are now rapidly tumbling.

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
FreeShitter's picture

Niggas are broke these days....

Haus-Targaryen's picture

Excited for used car prices to collapse in the coming year.  Could really like to get myself that new 330i plug-in hybrid.  120 mpg isn't bad. 

hedgeless_horseman's picture

 

 

My short CACC and ALLY call back in March worked out ok. 

 

More carnage to come.

 

I think Jasmine be havin' a hard time makin' her Obamacar payments.

DownWithYogaPants's picture

Well that's as ugly as a mud wall.

Bunghole's picture

You'll never get laid driving that car except by some hairy armpit hippie chick.

11b40's picture

Most here long ago stopped screwing in their cars.

de3de8's picture

Not a chance it will sell for 6800, and the company stay in business. Now if it was an Obamy hard on electric, different story.

Syrin's picture

It's official.   This new comment format is as bad or worse than those at Breitbart

Kirk2NCC1701's picture

I hated it on Day 1 (yesterday), but am getting used to the new format on mobile devices.

Like the fact that the deeply nested posts no longer are so skinny and long. THAT was a real pain. Especially when some bloggers would hijack the discussion into irrelevant alleys.

Syrin's picture

In those threads, it was clear who people were replying to.   Now it's a PITA

Tarzan's picture

According to Krugman all except "angry white Republican men" are excited to support a continuation of Obama's policies...

"Maybe a majority of Americans, while not full of joy about the aftermath of financial crisis, think pretty well of Obama, and are reasonably willing to support a continuation of his policies. Maybe the Trump phenomenon is about the rage of angry white Republican men, a rage not shared by voters at large. Maybe Clinton is a much better candidate than she’s given credit for — her main problem is not lack of “authenticity” or whatever, but the unremitting hostility of the media, which have given her far more negative coverage than they’re given anyone else."

replaceme's picture

unremitting hostility of the media, which have given her far more negative coverage than they’re given anyone else

I wonder if he believes this, or if he's just shilling - if it's the former, he's seriously deranged. If he's shilling, he's the sack of shit I've come to know and love.

DownWithYogaPants's picture

Krugtron robot overlord enforcer of Keynesia says "Borrow more monay!" 

DownWithYogaPants's picture

Hate this new layout.  Type too big.  It's like kiddy book

MalteseFalcon's picture

I'm not buying a car until I can get one with fins.

And I want a chrome jet on the hood.

Fins and jet or no deal.

DavidC's picture

"Markets" loving it.

DavidC

nibiru's picture

Don't people have money for cars? Whaaat? In such a great economy now? It must be their healthier lifestyle choices - they go for bikes nowadays!

 

 

http://independenttrader.org/the-other-face-of-a-crisis.html

Bill of Rights's picture
  • GM sales down 18% compared to -13% estimate
  • Ford sales down 6.1% compared to -4.9% estimate
  • Fiat Chrysler sales up 1.1% compared to -0.7% estimate
  • Mazda US sales down 4.3%
  • Nissan sales rise 13% compared to -1.0% estimate
Sofa King Confused's picture

When I can buy a new truck for under $40,000 I'll buy one.  Until then I'll drive my old one till it dies.

Bill of Rights's picture

Your talking to a guy who drive a 29 year old car my friend...

Zero-Hegemon's picture

Same here, rebuilding a replacement transmission and engine, hopefully be ready before hitting the 200,000 mile mark on my truck. Yah gots to be prepared.

Kirk2NCC1701's picture

Sales are Braking Bad.  (Pun intended).

Maybe if they throw in some Pot, or some Crystal Blue Persuasion?

Racer's picture

New UK road tax changes will make it very expensive to tax new cars (even very low emission ones) that are over £40K new.

The rules for 2017 were changed to account for the growing number of tax-exempt cars being purchased!


B-Bond's picture

Next assignment: Belle Isle Casino.

Sky flyer's picture

Worst since Lehman?

BlindMonkey's picture

Oh man.  4 great doom porn articles in a row!!

 

This will take me to lunch time...

ChargingHandle's picture

Are you telling me people are not the purchasing $70,000 pickup trucks now?

NEOSERF's picture

$70K trucks with 7 year loans or 3 year ultralow leases basically allowing people to "hold inventory" in their driveways because with 6 or 8K miles allowed to be driven, that is what you are doing for the automakers...you are taking inventory off their lots (and books) and putting it on yours.  Similar to the agreement you get with a mortgage...you get to maintain it for BAC or WFC or Citi who knows you won't finish the lease and gets to sell it to some other schmoe after 7 years where you paid 70% interest during that time.

Kirk2NCC1701's picture

You should be an Applied Math & Social Studies teacher, to open up the eyes of the unwashed sheeple.

You totally nailed it.

p.s. The Dealers ALWAYS make money, even when the car salesman does not.

That's because there's a 2-part Profit Margin: the sales price reduction is ALWAYS on the Front End, where a lower price leads to a lower commission to the salesman.

The Rear-end profit margin remains untouched and is 100% invisible to the salesman. Only the slick Finance guy behind the desk (banging on his keyboard like a Chimp) knows the gory details and how low he will go. Only 25% of salesmen make a living wage and stay in the business. The rest move on, for better pay and hours in other Service jobs. With that kind of staff turnover, is it any wonder that people hate car dealers and genuinely desperate salesmen?

Russian, Ukrainian and Vietnamese buyers have figured this out and will use their national social network to determine the absolute lowest price in town for any car or commodity. As a salesman you just can NOT sell them on anything other than "What is lowest price?"^n

Gert_B_Frobe's picture

Had three new car dealers open up by me in the last year, plus any piece of vacant commercial property is being leased to store the surplus. Anyone buying/leasing new is an idiot ... and their parents are probably idiots, too.

Yukon Cornholius's picture

But Ford makes their cars out of military-grade aluminum. Denis Leary yells that at me every time I try to watch the game. People don't want military grade aluminum or something?

Consuelo's picture

 

 

Did someone mention Dennis Leary...?

"I use public toilets and I Piss on the seat, I walk around in the summertime saying how about this heat...!!"

 

Yukon Cornholius's picture

You, sir, are what they call an asshole. ;)

Lostinfortwalton's picture

There is no such thing as "military grade" aluminum. Most airplanes are made of 2024 aluminum, military or civilian.

Lostinfortwalton's picture

There is no such thing as "military grade" aluminum. Most airplanes are made of 2024 aluminum, military or civilian.

Consuelo's picture

 

 

"F-Series truck sales rose 9 percent and van sales had their best May since 1978 on the strength of a 16 percent gain by the full-size Transit." 


There's your 'lagging indicator', right there.   Transit vans are primarily commercial vehicles for transporting small freight - think UPS/FedEx/DHL and other various & sundry carriers - oh, and Amazon...  

 

Spikes in purchases of these 'assets' as seen with the Transit, are usually the last gasp of expenditures which glide on a film of cheap money, and fulfill end-user/retail demand.

There are going to be vehicle/asset auctions the likes of which have never been seen before when the consumer taps out for good.    Could not happen to a better administration...

 

SubjectivObject's picture

Transits are the new motor home.

Falling Down's picture

My buddy who sells Fords is getting desperate, he's had maybe 3 or 4 sales in the last two months.

Dealership he works for continues to receive vehicles from Ford that they don't want, but have no choice but to take them.

He almost took a part time job at Kroger, but turned the job down at the last minute. Bad move, as he's now begging for money from family and friends, just to pay house bills.

Orders at the factory I work for are way down, compared with Q1 earlier this year.

 

 

 

 

Buster Cherry's picture

I wish I could buy a truck without the plethora of gagets and gizmos. Just an automatic, stereo and air conditioning please!

These doodads are what make trucks so fucking expensive.

 

I'm about to buy a 2003 F150 for $1000 that runs great with AC and stereo.Everyting else is manual, even the crank windows. Ah, the good old days.. 

firstdivision's picture

I think the biggest news is that Fiat/Chrysler sales rose YoY.  I must really be in crazy town.

VWAndy's picture

  Wow! They ran out of hoodrats. I guess they are going to need to go with plan B. Selling cars to inmates.

Reginald Blome's picture

Vwandy- free vehicle with any .gov "job" - it's only fair!

Zero-Hegemon's picture

New F150s with all aluminum bodies and twin turbos easily tacks on an additional 15-20k purchase price. And guess what, the insurance on those aluminum bodies is higher and the turbos won't last nearly as long as the engine. So what are you going to do, drop $8k on new turbos on a V6 truck with 100k miles? I didn't think so. The 5.4 V8s aren't perfect either, but at least you can make them work without the hassle of turbos.