Sales Decline Quickens as U.S. Carmakers Cut Fleet Business
Sharp cutbacks in new-car sales to fleets last month contributed to an accelerating drop in overall volume for Detroit’s traditional domestic brands.
Sharp cutbacks in new-car sales to fleets last month contributed to an accelerating drop in overall volume for Detroit’s traditional domestic brands.
General Motors says its U.S. sales in July skidded 15% to 226,100 units, dragged down in large part by an 80% drop in fleet sales. Ford cut fleet sales 26%, and its overall deliveries declined 8% to 200,200 units. Fiat Chrysler Automobile’s U.S. operations saw sales fall 10% to 161,500 vehicles, also hampered by lower fleet sales.
Carmakers use fleet sales to bolster their overall volume and market share. But fleet business generates skimpy profits. The stream of relatively plain used cars that results when fleets unload high-mileage cars also depresses pricing in the used-car market—and puts negative pressure on new-car prices.
GM, Ford and FCA have cautioned that their profits in the second half of 2017 aren’t likely to match first-half performance.
The overall U.S. car market reached a record 17.55 million units last year. But demand through the first half of 2017 was 2% below the year-ago total. Market analysts LMC Automotive predict full-year sales will shrink to 17 million units.