'Detroit 3' June Auto Sales Crash 6% YoY...Just Enough To Spark A Massive Equity Buying Binge

It seems that "Big 3" auto sales for the month of June managed to hit a sweet spot whereby they were down just enough year-over-year to spark a massive equity buying binge on a shortened holiday trading session.  GM, Ford and Chrysler posted YoY sales declines of 6% on average, which was less negative than expected, so positive (negative x negative = positive...it's just math).

 

Meanwhile, in another positive sign for the auto industry, Ford, which previously described the current sales environment as a 'plateau', confirmed on their sales call that the "industry peaked" last year and was unlikely to top 2016 sales figures at any point in the near future. 

 

Overall inventory days continue to come in at roughly ~15% higher YoY...which we assume the market also views as a 'positive' because it provides consumers with a better selection?

 

Meanwhile, GM's inventory days were up a modest 46% YoY to an all new record high of 105 days...a rather staggering negative statistic which was also promptly dismissed by the market.

 

Finally, as Stone McCarthy Research points out, Americans, flush with their $0 down, 0% interest for 84 month auto loans, continued to shun cars for much more expensive, and profitable, trucks and SUV's.

General Motors domestic car sales came in much lower than we expected, and declined nearly 34% from June 2016. Their domestic light truck sales were much stronger than we expected, and were up over 7% from last year.

 

Domestic car sales were weaker than expected for Ford as well, and fell 23% from last year. Ford domestic light truck sales also came in below our expectations, though were not weak as ford domestic car sales, and were only up about 6% from June 2016.

 

Chrysler domestic light car sales came in right where we expected, down 19% from last year. Domestic light truck sales for Chrysler were below our expectations though, and fell around 3% from last year.

Car sales:

 

Truck sales:

 

In summary, it was a good news day for auto investors.

Comments

xtremers9 (not verified) Mon, 07/03/2017 - 15:52 Permalink

auto sales have topped. but auto sales tend to top a few years before the next recession begins

I am Jobe Mon, 07/03/2017 - 15:55 Permalink

First World Problems, wait 2nd World Problems, wait going to Third World soon, USA USA. This 4th go out there and yell , Independence Day or what ever 

Yen Cross Mon, 07/03/2017 - 16:02 Permalink

 I see debt, for as far, as the eye can see... Did anyone notice the euro nosedive? Probably not, because the machines were buying usd/jpy tho keep the eur/jpy farce alive.  I'l be shorting eur/jpy very soon.

montresor (not verified) Mon, 07/03/2017 - 16:05 Permalink

Get the saws and start cutting those cars into body armour.. Stack the tires to burn and set a perimeter.. Who says there's no use for that unsold inventory?

adr Mon, 07/03/2017 - 16:14 Permalink

And those are seasonally adjusted channel stuffed sales. Wonder what the real numbers were. I was in a Honda dealer for three and a half hours last Friday. Total customers over that time, one. It was a lease trade in.  

Md4 Mon, 07/03/2017 - 16:22 Permalink

The "Big Three" (such as they still are) would be wise to get out of the car part of the business, and focus on only building trucks, and maybe, commercial vans.

Build a widely-customizable variety, starting at low price points for barebones models.

Build them like a Toyota too.

Then, pay workers well to actually give a shit about quality.

And for once, take less in profit per unit. Excellent product at an affordable price. Make workers and customers the priorities for a change...

Tell Wall Street to go to hell, too.

They might be amazed at the result.

exartizo Mon, 07/03/2017 - 18:46 Permalink

ok gentlemen get your pencils out and let me explain this trade to you in layman's terms:

1. BUILD AS MANY TRUCKS AS YOU CAN WITH MASSIVE INVENTORY LEVELS IF YOU ARE A US CAR MANUFACTURER.

2. MAKE IT LOOK LIKE YOU ARE JUST FOLLOWING THE "TREND" INTO HIGH DOLLAR SUV'S OUT OF PASSENGER CARS

3. READ THE NEWS EVERY DAY.

4. UNDERSTAND THAT MR. TRUMP HAS A SERIOUS CURRENT GRUDGE MATCH WITH MR. ASSAD AND KIM JONG UN

5. AND OH YEAH, QATAR AND UMMM... RUSSIA AND OH YEAH... IRAN.

6. AND OH YEAH. WITH CHINA.

7. THEN YOU REALIZE THAT MUCH OF THE WORLD REALLY STARTS TO RESEMBLE A MASSIVE TINDERBOX.

8. AND THEN.. IT COMES TO YOU... THAT ONE DAY, POSSIBLY VERY SOON, THAT MASSIVE INVENTORY OF HUGE SHIT AMERICAN TRUCKS WILL BE DEPLOYED MILITARILY... MODIFIED OR NOT.

9. AND OH YEAH... THE UNITED STATES GOVERNMENT WILL COMPLETELY BUY OUT THAT "UNINTENDED INVENTORY BUILDUP" (INCLUDING ALL THOSE F-150's WITH LEATHER SEATS, RUNNING BOARDS, AND GPS) FOR GM, FORD, AND FIAT/CHRYSLER AT A HUGE PROFIT FOR THEM.

ok boys and girls.

now you get it.

...you might also now understand the Incredible Massively Inexplicable Levitation Of Oil in the same terms given a massive worldwide glut of oil and massive storage of oil by nations around the world.

and oh yeah, the massive, but only beginning, run into cryptos out of fiat because of the number one factor of cryptos that makes the difference...

ANONYMOUS PORTABILITY

Irving Phelps Mon, 07/03/2017 - 19:41 Permalink

Yup, the fucktards on the PPT didn't take the day off. Stocks up...check. Oil up,...check. Dollar up...check. Bond yields up...check. Gold smashed...fucking A! That's their definition of a job well done in a thin market. Fucking cowards!

the piper Tue, 07/04/2017 - 02:10 Permalink

There are 2 closed/abandoned malls in our metro area the parking lots of which are being used as the 'overflow storage' lot for the local Ford assembly plant.  Mostly Transit cargo vans and F150s (commercial fleet vehicles; all painted white).  Definitely looked to me like about a 4-5 month stockpile.

rent slave Tue, 07/04/2017 - 07:19 Permalink

Asians living in America do not buy American cars.Sure,they're more reliable for the first 10 years,but what about the second or third 10 years?