The biggest U.S. automakers, General Motors Co (GM.N) and Ford Motor Co (F.N), reported July U.S. sales that disappointed Wall Street on Tuesday but results were strong overall for the industry despite fears its long growth spurt may soon be over.
GM reported that sales fell 2 percent to 267,258 vehicles, at the low end of expectations, while Ford posted sales of 216,479 vehicles, down 3 percent.
Overall, July U.S. auto sales on Tuesday rose 0.7 percent to 1.52 million vehicles, according to Autodata Corp, for a seasonally adjusted annualized rate of 17.88 million vehicles. Autodata said the annualized rate for July was the highest since last November.
Analysts polled by Reuters had expected, on average, 17.7 million vehicles on the annualized basis, and 21 economists polled by Reuters had expected 17.36 million vehicles.
GM’s chief economist, G. Mustafa Mohatarem, and Ford’s sales chief, Mark LaNeve, both said sales are still at healthy levels.
Sales for the year were 1 percent higher than they were at this time in 2015, which ended at a record high, Mohatarem said. “Let’s calm down on the doomsday talk,” he said at an industry conference in Traverse City, Michigan.
GM thinks there is potential for a new record for U.S. industry auto sales this year, Mohatarem said.
Nonetheless, GM shares shed 4.4 percent, Ford slid 4.3 percent and Fiat Chrysler Automobiles NV (FCHA.MI)(FCAU.N) dropped nearly 4 percent.
Each of Ford’s four top-selling models lost ground, including the Explorer SUV, which dropped 22 percent. GM and Ford are the market leaders by sales volume.
FCA, the No. 4 by U.S. sales, said its sales rose 0.3 percent, missing estimates.
Since 2009 when auto sales slipped to a modern-day low, the industry has posted annual growth.
“The growth is over,” Ford Chief Financial Officer Bob Shanks said in an interview with Reuters last week. Pent-up demand built during the last recession has been satisfied, and lower used car prices are drawing some buyers away from new vehicles.
Wes Lutz, owner of Extreme Chrysler Dodge Jeep Ram in Jackson, Michigan, said consumers “are maxed out and can barely afford the vehicles they are driving.” Lutz said he is expanding his used car showroom, anticipating that new vehicle sales will decline.
Japanese and South Korean automakers reported more robust monthly sales than had been expected, boosting total vehicle sales as consumers continued to spend on pickup trucks and SUVs.
Toyota Motor Corp (7203.T), No. 3 in the U.S. market, reported sales down 1.4 percent, but it surpassed expectations.
Showing the largest gains were corporate stablemates Hyundai Motor Co (005380.KS), sales up 5.6 percent, and Kia Motors Corp (000270.KS), sales up 6.5 percent, beating expectations.
Incentive spending in July was 9.9 percent of average vehicle selling prices, up from 9.6 percent a year earlier, said auto sales website and industry analyst TrueCar Inc. (TRUE.O)
While Wall Street took a dim view of American automakers on Tuesday, sales of SUVs and pickup trucks, which are responsible for record or near-record earnings this year for GM and Ford, are expected to continue to rise.
Sean McAlinden, chief economist at the Center for Automotive Research, said on Tuesday SUVs and other light trucks could account for 70 percent of the U.S. market within two years because of low gas prices. They represent about 60 percent of the market now, up from 50 percent in 2010.
Citi analyst Itay Michaeli said sales volume should fall in August in part because of fewer weekends than in July. But he emphasized that as sales plateau, they still remain historically strong.
Japan’s Honda Motor Co (7267.T) said sales were up 4.4 percent, and it joined Toyota in reporting higher-than-expected July U.S. sales. Nissan Motor Co (7201.T) said sales rose 1 percent, including a 33 percent hike for its top-selling model, the Rogue compact SUV.
FCA last week restated its monthly sales going back to 2011. It is under investigation by the U.S. Justice Department for its sales reporting practices.