August Auto Sales A Disaster As Ford Admits "We Think Sales Have Reached A Plateau"

Tyler Durden's picture

August auto sales were pretty much a disaster this morning with every single OEM missing analyst forecasts. 

Ford executives provided the most sobering commentary on future auto sales saying they believe sales have "reached a plateau" and will be "at a lower level" in 2017.  When questioned on the notion that sales had "plateaued," Ford noted that "we're no longer in a period where we have a lot of pent-up demand coming out of the financial crisis."  Ford also noted that retail incentives continue to run at "historically high levels."  Below are some of the key comments from Ford executives describing the current conditions in the auto market:

"For the remainder of the year, we continue to see retail in the industry provide incentives still running at historically high levels, but down versus the record that we experienced in 2015.  Looking ahead to 2017, we continue to see industry sales are strong, but at a lower level than this year."

 

"Sales have reached a plateau."

 

"It's just that we're no longer in a period where we have a lot of pent-up demand coming out of the financial crisis. So that's why, I think we use the term plateau"

 

"Comparisons for the rest of the year are going to be really tough."

Ford also noted that dealer inventory ballooned to 81 days this August compared to only 62 days last year.  Moreover, fleet sales to rental companies were down 32% YoY.  Meanwhile, Ford's largest vehicle lines were all down YoY, including:  F-Series down 6.1%, Escape down 2.8%, Explorer down 15.5% and Fusion down 32.6%.

Meanwhile, GM also missed with overall sales down 5.2% vs. estimates of -4.9%.  Dealer inventory also increased for GM to 74 days from 66 days last year.  Meanwhile, GM's popular pickups were also down YoY with the Silverado down 4.7% and the Sierra down 17.7%.  

The other OEMs didn't do any better:

August 2016 Auto Sales

 

Weak sales came in spite of massive YoY increases in incentive spending with Ford, GM and Chrysler all up 18.0%, 7.9% and 16.0%, respectively. 

 

Of course things could always be worse.  Venezuela sold a total of 193 cars in July (that's 193...not in thousands...just 193) after they thought they'd plateaued from 2009 - 2013. 

Venezuela Auto Sales

 

That's the crazy thing about "plateaus" there's a cliff on both sides.

 

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toady's picture

Sorry to go off-topic, but I had a chance to catch some MSM today and it's totally ridiculous. Non-stop trump bashing. I caught some of his speech last night.... a little blah-blah-blah for me, but not the "pure satanic hate speech" the MSM is saying today.

Is the MSM always like that? Just twisting &  turning every syllable? I'm starting to reconsider the definition of "is".

Bill of Rights's picture

Your first mistake bro was watching the news in the first place. Funny thing is I know of no one who watches TV or the so called news any more.

toady's picture

I hardly ever watch this stuff, but the wife watched the speech last night, and I took the day off and thought I'd check out the aftermath. 

Totally ridiculous. 

SubjectivObject's picture

I agree it is shocking to see what is the character of media commentary.

Completely different from what I may rumminate on my own from reading internet/blog content.

People visit and are supprised when we have to plug the TV in (lightening active), and are more supprised that the signal does not come through cable or satellite (OTA).  The thing might go months without being used.  Lately used as distraction for visiting attention deficit kids who have no interest in creative activities (smells like work, it's hot out).

BigCumulusClouds's picture

The MSM has been like that your whole life. The CIA has had its hands in the media for years and then there are the masons.

"There is quite an incredible spread of relationships. You don’t need to manipulate Time magazine, for example, because there are [Central Intelligence] Agency people at the management level."
--William B. Bader, former CIA intelligence officer, briefing members of the Senate Intelligence Committee, The CIA and the Media, by Carl Bernstein

"The Agency's relationship with [The New York] Times was by far its most valuable among newspapers, according to CIA officials. [It was] general Times policy ... to provide assistance to the CIA whenever possible."
--The CIA and the Media, by Carl Bernstein

And then there are those who research the freemasons and say "every CEO of major corporation in the USA is a mason."  And we all know the masonic institution is a pyramid and if you are a mason, you must always, subject to the penalty of death if 3rd degree or greater, help another mason.

wisehiney's picture

Two young chicks that work with my hen were laid off yesterday.

They had both bought new cars within the past six months.

Aww fuck, here come the bail outs.

Consuelo's picture

 

 

And if they were smart, and invested ~$5k in a set of bolt-ons, the 'options' table just got a Lot Bigger...

silverer's picture

Well, somebody's bailing them out. At least it's not tax dollars. Or maybe it is? lol

TheMeatTrapper's picture

People are amazingly short sighted these days. They gave me a fresh out of college kid to train. He showed up on Day 1 of the new job driving a brand new BMW 635. I drive a paid for Ford Ranger. He also already knows everything, which makes my job of training him a lot easier. 

Shpedly's picture

Make sure you tell him, "it's what you learn after you already know everything, thats most important".

BigCumulusClouds's picture

QE4 is in the works.

wmbz's picture

Here in central S.Carolina our clown prince of car dealers"JT" has opened up another dealership. The rednecks around here love "free" hot dogs and popcorn, and JT has plenty of it. They will sign up for anything as long as it's "free"!

As one of JT's window licking customers said.... "I bought a new truck and JT gave us a free cruise"

~ In steerage I'm sure!

 

firstdivision's picture

Honda and Toyota sale being way down...that's a serious harbinger

Shpedly's picture

Yup. Local Toyota dealer has a big banner out front. "Come in and get HISTORIC incentives"

Wahooo's picture

I'll wait to buy until thry're throwing in a free membership to the local coubtry club.

Berspankme's picture

I was at a Toyota dealer last week (getting parts) and noticed they have pretty big incentives on Tacomas. That vehicle has almost never had incentives on it. No 1 vehcile made for resale value. Things must be getting tough out there

bada boom's picture

Time for negative rates on car loans.

larz's picture

Stop pretending that there is a recovery and that people are respectfully employed  can't buy a car without income 

Chauncey Gardener's picture

You can't borrow your way to prosperity. And, it doesn't help that ALL the auto manufacturers have stuffed the channel to the gills. It doesn't work anymore.

Atomizer's picture

Focus burnt-out too many hand brakes and flatten sections of rear tire wheels. 

How is Ma and Pa Kettle math working out in new Mexico auto plant? Hahahahahaaa. 

Stupid fucks. Yes, you Ford CEO's. You should be ashamed of yourself. Be thankful that I still own two Lincoln SUV's. Don't you still own the engine plant in Cleveland Ohio? Bring back jobs. If memory serves me right, it's a foundary that made cast iron engines. You switched to aluminum and shipped to Mexico plant. Have no idea if door are still open, don't fucking care. Just remember you were near Cleveland Hopkins Airport. 

MATHS comedy

 

 

Richard Head's picture

GM will be fine. Did you all see the TV commercial where they drop a load of sharp bricks into the beds of Ford and Chevy pickups? That sold me on Chevy's steel bed. I may buy 2.

Chauncey Gardener's picture

Military grade aluminum. Ecoboost V6. Any wonder why Dodge RAM and GM pickups are selling like crazy? Meanwhile, the Ford Foundation doles out millions to BLM. Brilliant.

 

Consuelo's picture

 

 

Dontcha just love the smell of $4-Trillion in the morning (only if there's a 'shock' though...)

redman38's picture

The last line was hilarious

PositiveChanges's picture

More proof of WDC turning off the spigot to bolster the fake reporting on Obama's spending.  You watch, magically this year reported spending will be down.

The feds have been on a car buying spree all during this presidency.  Driving around Michigan, so have the cities, counties and the state.

Gotta help the car unions out if we want to continue running things.

Funniest part is that while the autoworkers remain the best "private" jobs in America, they continue offshoring their suppliers and eating all their seed corn.  Seems financially sound at the time.

The entire economy is nothing but graft, lies and bullshit.

Wheels are really starting to fall off our buses now.  I, for one, think it's about damned time.

Trump wins, then owns the inevitable collapse.  Our Hillary wins, and the lies just keep getting deeper but the collapse happens anyway.  It will be blamed on repukes. 

Either way the conservatives and small biz owners will be blamed and the demise of both demanded by the majority.

What fun.

dogbert8's picture

What is the fascination with new vehicles every 2-3 years? Don't people realize how damned expensive that is? I bought a 2004 Lexus in 2003 and a 2005 Tundra in 2004 and both are not only paid for, a long time ago, but both also are going strong. The Lexus has 101k+ and the Tundra, which doesn't get out much, has 56k miles on it. I save a bloody fortune by not having monthly vehicle payments and only taking care of regular maintenance. I understand people can't pay cash for these expensive vehicles (though they could save enough for a great used vehicle), but why are people resigned to being saddled with vehicle payments every month of their lives?

SubjectivObject's picture

DD is 04 RSX-S.  It makes the good noise.

These things are built solid.

Aubiekong's picture

My truck is paid for, has 130K miles, its a 2007 and there is no way in hell I would trade it in for a 45K+ truck note.  When the engine or trans goes I am planning on rebuilding them and keeping this truck on the road, screw debt...

Kprime's picture

My truck has been paid for, for years.  It's a 2000, with 152K miles, runs great. I paid 16K for it years ago. My son-in-law just replaced all the coils and plugs.  cost me $85 total.  No way in hell would I consider a 45K note.  It will be the last truck I buy.  It has none of that follow you wherever you go spy crap.

silverer's picture

Check out Jasper for your rebuilds unless you plan on doing it yourself. They warranty 3 years, 36K miles and offer performance engine options with the same warranty. You can get your car serviced anywhere if a problem crops up due to them, and Jasper will pay the bill.

Shpedly's picture

Jasper does a top notch rebuild for sure but usually you can just find a better newer car for the price of the engine and install. That's unless your just in love with the vehicle or it's something unique and desirable. Also, Jasper pays a pitance per labor hour for any work thet has to be done under warranty, so you will pay out of pocket. The upside is, I have never had a problem with any Jasper unit my shop has ever installed. 

skunzie's picture

Agreed.  I drive a 1990 Chevy Cavalier with 225k miles on it.  Everything still runs great, it uses no oil and I just installed a new AC unit after the old compressor seized up.  Haven't had a car payment for 23 years and hate the thought of my baby giving out.  You are right, screw debt!

Aubiekong's picture

The biggest reason people live pay check to paycheck is a car loan that keeps them there...

ali-ali-al-qomfri's picture

 driver-less cars, cars without drivers.

 

buzzsaw99's picture

life long ford person here who will never buy another ford. ever.

Berspankme's picture

I don't know if this is true but a guy I know told me they had to remove a front fender on his Fusion to replace a headlight? 

Shpedly's picture

Hell thats nuttin. 2011 Toyota Camry front suspension control arm replacement. This is right out of the shop manual. Step #1 is a doozy.

FRONT LOWER SUSPENSION ARM (except Models with 2AR-FE and Automatic Transaxle): REMOVAL

HINT

* Use the same procedures for the RH side and the LH side. * The procedures listed below are for the LH side.
  1. REMOVE ENGINE ASSEMBLY WITH TRANSAXLE

Many an Audi and VW require removal of the headlight to replace the main beam bulbs. First step to removing the headlight? Remove front bumper fascia/skin.

Chauncey Gardener's picture

Oh, like having to take your wife's 2006 Mazda Miata to a mechanic to replace the light bulb in the headlight? You only have to put the car up on a lift, remove the tire, remove 13 fasteners to take out the inner fender liner to get to the damn bulb. I gave up after sweating and swearing for 45 minudtes on my driveway. What brilliant design and engineering...but this is nothing new.

My Dad's '64 Cadillac Sedan DeVille required removing the rear bumper to replace the tail light bulb. That GM "mark of excellence."

Chauncey Gardener's picture

Oh, like having to take your wife's 2006 Mazda Miata to a mechanic to replace the light bulb in the headlight? You only have to put the car up on a lift, remove the tire, remove 13 fasteners to take out the inner fender liner to get to the damn bulb. I gave up after sweating and swearing for 45 minudtes on my driveway. What brilliant design and engineering...

silverer's picture

I used to be a Ford fan, but now that I own a pickup, I don't like the new one's Ford has. The whole truck is jacked sky high, and the bedsides are stretched up higher as well. You have to stand on something to get into the bed and pick up something on the bed floor. It was the marketing people screwed up the pickups. Higher is not better, because the axles don't get any more clearance. And since my ride is a 4x2, I'm not concerned about ground clearance. Want to push your Harley up a steeper ramp? Fall over the side and gain more speed? Buy any pickup made in the last eight years or so. They all went sky high along with inflation.

Chauncey Gardener's picture

Not to mention to the big three as well as Nissan & Toyota are all in for "fashion trucks." Loaded to the gills with spendy options that you really don't need. Plus, the product managers at Ford should be shot by a firing squad for the decison to push the Ecoboost V6 and the all-aluminum beer can body. Just fucking unbeleivably stupid. Drove a Ford Fusion with the Ecoboost rental car this Spring, damn thing could barely get up 55mph off the onramp floored. Absoltely gutless. Beyond stupid product planning, due in a VERY large part to Obama's EPA minions' ridiculous CAFE standards.

Ajax_USB_Port_Repair_Service_'s picture

Just announced. 200 Harley-Davidson Inc. employees could face layoffs.

silverer's picture

I figured sooner or later everyone that wanted one would have one or two. Then what?

silverer's picture

Buying a new car or truck now is a rich man's sport, or a sheeple borrower's fool's errand.

MopWater's picture

 

Mrs Water has been wanting a new car for a while...I've been holding her off waiting for something like this.