By on June 30, 2017

FCA Brampton Assembly Line Challenger & 300 - Image: FCAAutomakers likely sold fewer than 1.5 million new vehicles in the United States in June 2017, a modest decrease of around 2 percent compared with June 2016.

While auto sales remain high by historic standards — 1.48 million sales would still make June 2017 more than 15-percent better than the 1.33 million June average from 2011-2015 — June nevertheless represents the persistence of a negative trend.

After 2016 ended with a December boom to close out the highest-volume year on record, auto sales in the United States declined on a year-over-year basis in each of 2017’s first five months. A 2-percent drop in June, worth roughly 30,000 lost sales, will run the streak of decreases to a full half-year.

The American auto industry’s decline comes as automakers continue to incentivize heavily and, fortunately for manufacturers, consumers grow ever more willing to pay higher prices.

LMC Automotive, Reuters reports, expects the average per-vehicle incentive to rise to $3,661 in June 2017, the highest level for June in history. At the same time, LMC forecasts record June transaction prices of $31,720.

Kelley Blue Book, anticipating an even more significant decline, expects modest year-over-year losses at General Motors, Nissan, American Honda, and Hyundai-Kia; heftier declines at Ford Motor Company and Fiat Chrysler Automobiles; a modest Toyota improvement, and more meaningful gains at the Volkswagen Group and Subaru. Ford and FCA will likely be the big losers of market share.

J.D. Power, in conjunction with LMC, says light truck sales accounted for 64 percent of June’s retail sales, marking a full year in which light trucks owned more than 60 percent of the market; cars less than 40 percent. Of the roughly 1.48 million vehicles likely sold in June, 21 percent were produced for fleets.

Automakers continue to push incentives as a means of reducing inventory, which, according to Automotive News, stood at 69 days of supply heading into June. (General Motors, Mitsubishi, and Volkswagen all had more than 90 days’ worth of stock at the beginning of June.)

Yet while automakers are elevating incentives in order to clear out the cars for which demand is shrinking so fast, average transaction prices are rising because the vehicles consumers are buying and leasing are often of the more costly variety.

While KBB believes compact car sales fell 5 percent in June and midsize car sales tumbled 11 percent, U.S. sales of full-size pickups, compact SUVs/crossovers, and midsize SUVs/crossovers bucked the industry downturn. In May, KBB said the average transaction price in those three categories were $46,522, $28,539, and $37,682, respectively. On the other hand, in those two car categories that make up the bulk of passenger car sales, transaction prices averaged $20,595 and $25,209 for compact and midsize cars.

[Image: FCA]

Timothy Cain is a contributing analyst at The Truth About Cars and Autofocus.ca and the founder and former editor of GoodCarBadCar.net. Follow on Twitter @timcaincars.

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24 Comments on “June 2017 U.S. Auto Sales Likely Slid for a Sixth Consecutive Month As Incentives and Transaction Prices Rise...”


  • avatar
    thelaine

    Yeah, my friend just paid around 65k for a diesel F-250. Holy sht. Transaction prices indeed. Less volume and more money? Doesn’t sound so bad for Ford.

    • 0 avatar
      FreedMike

      I’m still having a very hard time wrapping my brain around sixty-five large (or even more) for a truck…

      • 0 avatar
        thelaine

        Yeah. Me too.

        • 0 avatar
          JimZ

          nobody’s forcing anyone to go for the King Ranch or Platinum. an XL does the same job for $20k less.

          • 0 avatar
            FreedMike

            …which means I’m currently trying to wrap my brain around forty-five large for a truck…

          • 0 avatar
            JimZ

            the diesel option adds $9k right off the bat.

          • 0 avatar
            thelaine

            Yep. The diesel is really expensive, but he tows a motorhome.

          • 0 avatar
            bullnuke

            I purchased my F350 XL w/7.3 and 6MT, crew cab SRW short bed, “XL optional pkg. w/chrome bumpers and halogen headlights”, and an optional idle controller new in May of ’99. The sticker price was $31567.00. The same F350 XL crew cab SRW short bed w/diesel and auto and about the same equipment in 2017 stickers for $46735.00 according to the Ford website. Using one of those handy-dandy inflation calculators I find that $31567.00 in ’99 dollars equals $46499.00 in 2017 dollars. Sticker shock is real but understandable. As an aside I was buying gas in 1969 for $0.28 per gallon which is $1.90 currently – close to the $2.09 I paid to fill my vehicle last week.

          • 0 avatar
            Lou_BC

            @bullnuke – I did that same math once with the 1990 F250 reg cab I used to own except the 2017 has way more features for the price.

    • 0 avatar
      Big Al from Oz

      thelaine,
      Ford has over the past several years or so gradually ramped up it’s pricing. It seems to be a global move on Fords part.

      Ford might be trying to become Toyotalike, without the reliability.

      • 0 avatar
        stuki

        They’re just aligning the mix to better fit the purchasing power of their customers.

        Close your eyes and imagine a world where every single penny belongs to just one guy, some dude called Goldman. Noone else has a penny. He has it all. Not much use manufacturing tonloads of lower end cars then, is it?

        Now open your eyes, and see a world that is halfway between that one, and the one in existence in the 90s. Hence lower volumes, higher prices.

  • avatar
    deanst

    Todays the best time ever to buy a mid size sedan. Too bad nobody wants them.

    • 0 avatar
      FreedMike

      Or a compact.

    • 0 avatar
      seanx37

      Or a large sedan. FCA is practically giving away Chargers and 300s. I was at the Dodge dealer on Thursday. I managed to get them to knock $16k off the sticker of a Charger 392 Daytona(decal delete). $48k sticker price , they were willing to accept $32k. And seemed happy to do it. My insurance company had different ideas of course.

    • 0 avatar
      tekdemon

      Yeah you can get a Hyundai Sonata Limited (the base) for about $16K out the door pretax, even less if you’re either a very good negotiator who signs up as a “driver” for Uber (Hyundai is giving another $1000 off if you can show them the app showing you as an active driver) or if you qualify for one of the Circle plans that can add to the regular incentives. Some really crazy bargainers can get under $15K.

  • avatar
    Big Al from Oz

    deanst,
    Soon might be a good time to buy an upmarket, blinged out of lease car cheaply.

  • avatar
    Big Al from Oz

    How soon before pickup and SUV/CUV numbers are on the decline.

    Are the lease/loan periods longer for these vehicles? That could be why cars are dropping off first.

    • 0 avatar
      FreedMike

      I’d have to think longer-term loans would be more prevalent on trucks, just due to the higher price point.

      But given the resale value of trucks is bound to be strong these days, leasing would be a good alternative.

  • avatar
    mikey

    Up here in Ontario, I could easily run a 2500 series Duramax up to $100 K. As of this A.M. that works out to $77 K ..USD. By the time I take it home and pay the obscene taxes, and fees ? I think I would be pushing $100 K..USD.

    Two weeks ago I priced out a 17 Camaro 6 Automatic convertible. Nicely optioned, and with the top down , a sweet looking car. With discounts, and employee pricing, $54 K ..Canadian, to drive it off the lot.

    At the Ford dealer a comparable Mustang convertible.. (very hard to find a nicely optioned V6, though they could locate me one on a dealer trade) The Mustang would have run me about $49 K , out the door.

    Those prices have taken this old “baby boomer ” out of the market. I’ll stick to my plan and drive my EB Mustang forever.

    • 0 avatar
      thelaine

      Yeah Mikey, gonna drive the 04 Dodge pickup forever too. Just can’t comprehend that kind of money for a pickup. Love the Powerwagon, but….no way.

  • avatar
    slavuta

    So, check this. Sales are down, avg trans up. To me, this means that general public is buying less cars. But those that have money keep buying more expensive models, hence the avg trans is up. No wonder, recent report shows that only few can truly afford a new car.

    Now: “heftier declines at Ford Motor Company”

    Yes! May be I will in the end get Mustang for cheap

    • 0 avatar
      SaulTigh

      It’s a lot like movie theatres. Yearly revenue stays flat to slightly up most years, but admissions continue to decline. Theatres are all transitioning to a luxury model with powered recliners and food service. Fewer patrons, higher average check. Discount, 2nd run theatres are almost gone.

      New cars and going out to the movies used to be the purview of the common man in American, now, less and less.

      • 0 avatar
        joeaverage

        What is driving this? Are middle class jobs drying up? People spending differently? Boomers getting tight with their money since they retired?

        My town’s restaurants are full but then so are the car lots. Actually the car lots are overflowing with a few of them renting space down the street a ways.

        I can’t decide if people are nickel and diming themselves to pieces or if they figure they can’t afford a nice car and a home so they will just go out alot. I live in affordable flyover country.

  • avatar
    zip89123

    I have more faith in auto sales than I do KBB, Kelley Blue Book, who wants to besiege you with ads and block you if you use an ad blocker. So screw u KBB, obviously everything is for sale at your website.


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