After two back-to-back years of record car sales, automakers are officially flatlining. July’s 1.4 million in total sales was down 7 percent from 2016, as most automakers fell short of last year’s blistering pace. Now that we’re seven months into the year, the industry is on pace to reach 16.7 million sales by December 31, as compared to 17.8 million at this same time in 2016. After poring through data from WardsAuto.com and Automotive News, we’ve uncovered many dark spots. But these are still big numbers that just five years ago would have seemed impossible.
Winners and Losers
Last month, Subaru bucked all pessimism with a 7 percent increase in year-over-year sales (55,703); Ford Motor Company was down 8 percent (195,158). The only other brands to post monthly year-over-year gains were Acura, up 4 percent (14,177), Audi (18,824, 3 percent), Mitsubishi (8025 sales, 2 percent), Porsche (3901, up 1 percent), Lexus (28,902, up 4 percent), and Toyota (193,148, up 7 percent). That excludes Alfa Romeo, which just introduced two new models (see below).
Losses mounted at Hyundai (54,063, down 28 percent including Genesis), General Motors (225,947, down 15 percent), and Fiat Chrysler (160,223, down 11 percent). Even BMW (26,363, down 14 percent, including Mini and excluding Rolls-Royce) and Daimler (28,857, down 11 percent, including Mercedes-Benz and Smart) couldn’t equal their past totals. Tesla, though it doesn’t release monthly sales, was down an estimated 24 percent (3265). But totaling the year’s sales through July, six automakers are running ahead of 2016: Jaguar Land Rover (65,585, up 15 percent), Mitsubishi (62,601, up 5 percent), Nissan (947,983, up 2 percent), Subaru (360,513, up 9 percent), Tesla (23,631, up 14 percent), and Volkswagen (341,513, up 6 percent, including Audi and Porsche).
RAV4 and Rogue: Coming for that #1 Spot
Forget about Camry and Accord. In 2017, the battle for the best-selling non-pickup in the United States is being fought by the Toyota RAV4 and the Nissan Rogue. The Nissan has maintained its lead through July, but Toyota managed to move a whopping 41,804 RAV4s this past month (Nissan sold 32,425 Rogues), narrowing that lead to just around 2000 units. Nissan does have an ace up its sleeve in the form of the smaller Rogue Sport crossover, the sales of which are counted under the larger Rogue umbrella. Nissan refuses to break out sales of the two models, but a company spokesman said that sales of the Rogue Sport, which first hit dealerships in June, are just now ramping up, and it won’t be fully stocked until about September. That might be just enough to help Nissan stick it to Toyota by year’s end.
No matter what happens in this fight, it seems a sure bet at this point that the Toyota Camry’s long-running streak at number one is coming to a close, given that it lags behind both those crossovers by more than 15,000 units for the year to date. Both the RAV4 and the Rogue also seem poised to knock the Honda CR-V off its top-selling-SUV podium, as Honda has only managed to move 219,017 units through July to the Rogue’s 228,114 and the RAV4’s 226,570.
Inventories Align with Demand, But Not These Cars
Sedan sales continue to slide as customers drive off with similar-size SUVs and crossovers. As a whole, car sales are down 15 percent through July, while light trucks (which includes crossovers, pickups, and commercial vans) slipped only 2 percent. Automakers have reacted by curbing production and trimming inventory, so despite the Ford Fusion’s 29 percent decline through July, most dealers aren’t suffering a glut of cars on their lots. Through July 1, the Fusion’s estimated days’ supply (calculated by dividing inventory by the average daily sales rate) is 77 days. The Honda Accord, at 65 days’ supply, sells much faster (Honda dealers stock about 70,000 cars versus Ford’s 54,000 cars). Subaru carries as many cars as Buick (roughly 100,000), although they sell nearly three times faster.
How slow is slow? With most cars under 100 days’ supply, the Buick LaCrosse and Regal register at 171 and 213 days, respectively. The Lincoln Continental has 5500 cars across the country, which is a 147-day supply. The Acura RLX (351), Fiat 500L (188), and Chevrolet Impala (182) also are crowding dealers’ lots. Chevy dealers should let you steal a Spark. They’ve got a whopping 26,473-day supply with 11,200 cars on the lot (just 764 Spark hatches sold in July, an 82 percent decline). If you’re shopping for any of these cars, negotiate the hell out of them.
Here Come the Cash Incentives
As automakers start clearing space for 2018 models, they’re helping dealers move the 2017 models. In some cases, the deals through July 31 were lavish. Hyundai slashed thousands from nearly every model, with up to $6000 cash back on the 2017 Sonata, $3750 for the Santa Fe Sport, and $2000 for the Tucson. There were still 2016 Azera sedans on the lot, with offers of up to $4500 off. Fiat Chrysler and Ford piled on cash rebates, with up to $4000 off a 2017 Cherokee and $4150 off the 2017 Fusion. The Expedition carried a maximum $8000 rebate. General Motors was less generous, restricting most rebates to $2000 or lower. Available $1500 rebates off the top-selling Lexus RX and the popular IS helped Lexus scratch out a 4 percent increase in year-over-year sales (GS F and RC F buyers landed $4000). Camry buyers received up to $3500. There were no rebates at Honda, which has a strict policy against them. Instead, it offered lower financing rates (which in July were as low as 0.9 percent on the Accord). BMW rained down as much as $3000 on the 2017 3-series, X5, and X6.
Your buddy who bought the 2017 Rolls-Royce Ghost scored a $15,000 discount. But he still should have bought a BMW 7-series.
Alfa Romeo: A Minuscule Star Shining through FCA’s Cloudy Skies
Nearly all of FCA’s brands were down or, in the case of Ram, flat in July, leading to an overall 10 percent decline compared to July of last year. The only brand to increase sales was Alfa Romeo, the new Italian luxury upstart that’s finally starting to sell the Giulia sedan in more significant numbers. After selling just 43 units of the 4C exotic sports car last July, Alfa Romeo shot up to 1225 units sold this past month, marking a 2749 percent increase. Despite that eye-popping number, Alfa Romeo is contributing a minuscule amount to the company’s overall sales, with its 4944 units sold so far in 2017 making up 0.4 percent of FCA’s total.