Carmageddon: Ford & GM Sales Tank Despite Record July Incentive Spending

It was hard to find a bright spot for auto investors in July's auto sales figures released earlier today with GM down 15% YoY, Ford off 7% and Chrysler down 11%.

The companies blamed the drops on lower fleet sales but GM’s retail sales also fell 14.4% from July 2016.  Meanwhile, Ford and Fiat Chrysler retail sales had single-digit declines, and their fleet sales fell 26% and 35%, respectively.


Here's a recap of how each of the largest OEM's made out in July:


Three of GM's four brands posted double-digit sales declines in July with Chevrolet down 15%, Cadillac down 22% and Buick plunging 31%.


While GM blamed weak fleet sales for their abysmal month, their retail sales declined 14% as well.


The Chevy Spark minicar withered, falling 81.9% to 764 units for the month, while the Chevy Sonic subcompact car declined 47.3% to 2,552.



Ford retail sales fell 1% while fleet sales declined 26%.


Ford's flagship brand fell 8%, while the luxury Lincoln brand declined 2.5%.


Car sales were off 19%, including a 13% decline for the Ford Fiesta subcompact and a 42% decline for the Fusion mid-size car.


Fiat Chrysler:

All of Chrysler's major brands, except Ram, were down double digits. Jeep was down 12%, Chrysler 30%, Dodge 12% and Fiat 18%. Ram sales were flat.


Retail sales were down 6%, while fleet sales were down 35%.



The Japanese automaker soared past expectations for a surprise sales gain. The company's flagship Toyota brand and luxury Lexus brand were each up 3.6%.


With the strong sales performance, Toyota surpassed Ford in July as the nation's second-largest automaker for the month, behind only GM.


Toyota's passenger cars were weak, down 12% for the month, while sales of crossovers, pickups and SUVs rose 17%.

Despite the extreme declines at the domestic OEM's, the overall SAAR continued to hover around 17mm units, reaffirming, at least for now, Ford's assertion that sales will 'plateau' at current levels.


That said, overall inventory levels remain elevated despite the fact that incentive spending set a new record  of $3,876 per unit in the month of July.  Per J.D. Power:

Average incentive spending per unit to date in July is $3,876 per unit, a record for July, and surpassing the previous high for the month of $3,597, set in July 2016. Spending on trucks and SUVs is $3,700, up $194 from last year. Spending on cars is $4,174, up $436.


Incentives as a percentage of MSRP are at 10.8% so far in July, exceeding the 10% level for 12th time in the past 13 months


Meanwhile, GM's inventory continues to be the most bloated of all the OEMs with 939,831 cars still parked in dealer lots all across the country...equal to 104 days of supply.


Of course, as silly as it may seem, some analysts still found a way to be upbeat about the industry.  Per Detroit News:

“The fundamentals in the industry are still very, very strong,” said Kelley Blue Book analyst Alec Gutierrez. Big-picture indicators like fuel prices, employment levels within the industry and customer satisfaction are all at healthy leavels.


At a gathering of auto officials in Traverse City on Tuesday, several analysts delivered a similar message on the state of the industry: “The sky is not falling.”


Jeff Schuster, senior vice president of global forecasting for LMC Automotive, said despite sales numbers out of North America, there are reasons for optimism overall.


“Transaction prices are up, that’s a very positive thing…,” he said. “We’re looking at over $31,000 on average – up over a percent.”

But Ford and GM shareholders are starting to lose faith... are investors in the suppliers.


Oh well, we're sure this is just a temporary pause...the second half is sure to be better.


HelluvaEngineer Son of Loki Tue, 08/01/2017 - 17:58 Permalink

I own too many cars at the moment, admittedly, but they are all paid for.Anyway, my most recent purchase is an '84 Chevy with the 6.2 diesel.  It wasn't running so I got it for $2000.  Spent $600 in parts and upgrades plus my time.  Got it running and it runs great.  No power amenities but built to last a lifetime and a bad ass 4x4 system to boot.Why the hell can't they build something like that today for under $20k?  These construction guys running around in $60k diesels are friggin retards.

In reply to by Son of Loki

gregga777 tmosley Tue, 08/01/2017 - 18:11 Permalink

He is correct in his assessment. A $1,000 RPG can put a multimillion dollar M1A1 Abrams main battle tank out of action requiring a visit to the Lima Ohio Tank Plant for rebuilding.

An M2 Bradley was blown up by an IED in Iraq and the heavy bottom plate of the vehicle was found some distance away from the wrecked vehicle. Anti-tank weapons are getting cheaper with better guidance. It's not possible to up armor a vehicle to deal with all threats. Weapons that target the top of armored vehicles are particularly nasty.

Also, armored vehicles are virtual sitting ducks to dismounted infantry with AT weapons if not accompanied by their own dismounted infantry.

In reply to by tmosley

Canadian Dirtlump gilhgvc Tue, 08/01/2017 - 17:30 Permalink

I've always said, the best defense is to negotiate the right price. That being said I'll be looking used for something fairly quickly here, with the off lease bomb set to further blow a hole in the industry. Grand Cherokee 5.7 is top pick, with a silver twin turbo explorer being the other possiblity for juvenile reasons. The story here is stupid credit more than it is shitty cars.

In reply to by gilhgvc

Canadian Dirtlump Juggernaut x2 Tue, 08/01/2017 - 17:46 Permalink

I have a 2011 ram with 363 thousand kms on it and haven't had a problem with it. Nor have I had a problem with my Challenger SRT8. My borhter has a 2012 300c which he's had no issues with. I'll probably continue to press my luck as for SUVs I'm not interested in lifted minivans. I won't apologize for what anyone writes about them, but I've had no problems with domestic vehicles.

In reply to by Juggernaut x2

YourAverageJoe Canadian Dirtlump Tue, 08/01/2017 - 18:39 Permalink

My 2002 Silverado has 235k on the clock and runs like new.I had a guy at the Discount Tire look at it when I was getting tires put on and when he checked the mileage, he said: "Yup, it's a Candian made GM truck.Those are the best."I never knew that. My brother in law  has a 2000 GMC Sierra, also Candian built, that is still towing his boat. Apparently, you Canadian fellas know how to build a truck!

In reply to by Canadian Dirtlump

Canadian Dirtlump Angry White Guy Tue, 08/01/2017 - 18:10 Permalink

The funniest promotion I've seen here is buy a new titan get a versa for free.Ignoring that you'd be better off taking 15-20k off the price of the titan and driving off. I have good access to the fleet departments of most manufacturers thanks to my work here so our standard "deal" is invoice minus rebates plus a couple hundred bucks. Perfectly fine for the price being a phonecall away versus trying to play hardball with some guy who came from a furniture store and needs to rob / rape every buyer.

In reply to by Angry White Guy

wisehiney Tue, 08/01/2017 - 17:32 Permalink

oBUMMer/hitlery and socialist fed pumped it as hard as they could to get hitlery buying all of the shitty auto paper you know.It's all over now.

Restorative_Ally Tue, 08/01/2017 - 17:32 Permalink

With US working age population hitting peak and declining, as well as retired population per worker skyrocketing, it really should come as no surprise that this thing is going to fly apart spectacularly. And soon. 

Son of Loki Restorative_Ally Tue, 08/01/2017 - 18:05 Permalink

I agree. My dad is semi retired and still drives his Honda with 165,000 miles on it. I plan to do the same with mine. I will never overpay for a vehicle even if i have to negotiate with them for weeks. Most dealers are POS to deal with but that's life.It will save you money to take the time to wait and make them come down in my experience. Most of these vehicles are simply not worth anything near what they ask for them

In reply to by Restorative_Ally

Two Theives an… Tue, 08/01/2017 - 17:32 Permalink

Some of the vehicles on offer from these companies are laughable. Seriously. The European Diesel Ford Fiesta gets 65 MPG. US consumers would love a taste of that, but dumb-ass Ford won't bring them over from the UK where they are made.  

HRH Feant2 (not verified) Tue, 08/01/2017 - 17:33 Permalink

Ford needs to bring back the Ranger. It was affordable and a good basic truck. I know several professional's that use older models for their work truck. (Landscaper and painter).

serotonindumptruck HRH Feant2 (not verified) Tue, 08/01/2017 - 18:08 Permalink

I owned three Ford Rangers back in the 1990's.That particular model was planned obsolescence in practical application.Between 80 and 100 thousand miles, parts and components began to sytematically fail. Heater core, ignition switch, and ruptured thermostat housing were common.There's a reason why you don't see many Ford Rangers on the road these days. Edit: I've maintained my vehicles well my entire life, changing oil every 3K miles, run high-octane fuel most of the time, and other routine maintenance as necessary. The Ford Ranger was a POS.

In reply to by HRH Feant2 (not verified)