By on July 28, 2017

2018 Subaru Forester - Image: SubaruDespite all of the attention being called to the U.S. auto industry’s downturn in early 2017, first-half auto sales slipped only 2 percent from 2016’s all-time record highs.

But the rate of decline in July 2017 is expected to be the worst of the year so far, with forecasters generally calling for drops of at least 5 percent.

That will represent a loss of at least 76,000 sales in July alone.

Year-over-year, January volume only fell 2 percent below January 2016’s pace. February sales were down just 1 percent. March sales slid less than 2 percent, ending a first-quarter in which U.S. auto sales declined 1.5 percent, or approximately 60,000 sales.

April’s near-5-percent dive suggested a sharper downturn yet to come, but then May volume was only slightly south of flat. June sales were down 3 percent. Through the end of the first-half of 2017, U.S. auto sales were off 2016’s pace by roughly 185,000 units. 2017 Chevolet Colorado zR2 car shipping - Image: GMA forecast from J.D. Power and LMC Automotive suggests the overall 5-percent sales decline expected in July 2017 is only part of the picture. Within that overall image is an equivalent drop in retail sales and an 8-percent year-over-year increase in the average incentive spend (to $3,876). Loan terms in excess of seven years likely formed more than 6 percent of all finance arrangements for the first time ever. The typical new vehicle sold in July had already sat on a dealer lot for 72 days.

Meanwhile, Kelley Blue Book believes U.S. auto sales tumbled slightly further in July 2017, suffering a 6-percent drop to 1.43 million sales. With the downturn cementing, KBB now believes year end auto sales may well fall below the 17-million mark topped in 2015 and 2016 after 13 years of sub-17-million years.

Edmunds paints an even less rosy picture, expecting a drop in U.S. auto sales of slightly more than 6 percent in July. Edmunds forecasts an 11-percent sales decline at General Motors, America’s top-selling auto manufacturer, a 7-percent decrease at Fiat Chrysler Automobiles, and a 5-percent Ford Motor Company decline. American Honda is expected to report a 4-percent improvement.

Subaru, as we’ve come to expect, is forecast to report its 68th consecutive month of year-over-year U.S. sales growth, seemingly unaffected by waning industry-wide demand.

Automakers will issue their U.S. July 2017 auto sales reports on Tuesday, August 1st.

[Image: Subaru]

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

Get the latest TTAC e-Newsletter!

25 Comments on “Forecasters Believe July 2017 Was the U.S. Auto Industry’s Seventh Consecutive Month of Decline...”

  • avatar

    They (Nissan et el) brought demand forward w/ easy financing and relaxed credit standards.

    That said, new vehicles are too expensive for most Americans:

    From 2016: Most families in America can’t afford a new car

    • 0 avatar

      Most families can probably stretch their budget to buy a new car. The problem is when you’re trying to hit multiple goals all at once: buying a new car, putting money aside for retirement and kids’ college, maintaining charitable giving etc. You can’t do it all, and that’s when a used car makes a lot of sense for families.

  • avatar

    Affordability reflects the fact that people are buying $35,000 vehicles, not the $20,000 vehicles they can “afford”. I find it amazing to see people living in a $50,000 (or less) home with a $35,000 depreciating asset in the driveway.

  • avatar

    The flood of returned lease vehicles is going to really put downward pressure on used car residuals, which is going to make it very difficult to offer great lease deals on new cars without someone subsidizing them. Unattractive lease deals is going to badly hurt the new car market, and might shock marginal buyers to start looking at cars they can actually afford. Unfortunately cars that marginal buyers can afford (smaller cars, base cars, mainstream brands) are also the least profitable to the car makers. There could be a whole lot of financial hurt coming soon to the car industry, but a great time if you are looking for a great deal on a lease return.

    • 0 avatar

      They’ve been predicting this flood of cars and lower used prices for better than a year now, but when exactly is it supposed to happen? I haven’t seen it yet on any of the local car lots. So far it’s been no better than a prediction from Al Gore.

      • 0 avatar

        It’s happening now, but the real downward pressure on prices is being thwarted by (temporarily) by so e short-term, unsustainable gamesmanship between ABS bundlers and auction houses + storage facilities (there are more lightly used cars in storage, representing wasting assets with wasting residuals, than at any other time in history – I’ve seen this first-hand in the metro Detroit area where vehicles are literally being stored on top of capped former landfills aside RVs and boats).

        This can only go on for so long before the supply/demand equilibrium curve forces prices down to their true actual transaction price levels, which are likely 20% to 30% below those reported at end of June, 2017.

  • avatar

    Just needs some more cash on the hood, amirite?

  • avatar

    This WSJ table clearly shows the problem is cars, especially large cars. Otherwise a nice uptick in SUV/light trucks.

  • avatar


  • avatar

    The business cycle strikes again. As it always does.

    We’ve been due for an economy-wide recession for a while, which ought to make November 2018… Interesting.

    • 0 avatar

      Well, that’s better than a recession/depression caused by malfeasance in the banking/finance sector.

      Those tend to have a slow, prolonged recovery period.

  • avatar

    What’s a brand new car/truck got (that I just gotta have!), that one just coming off a lease won’t 99% satisfy?

    It’s not that the new stuff is too expensive, it’s not, but if I got a tired 2009, why not ditch it for a cleaner, much lower miles 2012 that some sucker religiously maintained, for a net outlay less than the “down payment” on a new one??

    • 0 avatar

      Do people “religiously maintain” their leases?

      • 0 avatar

        Compared to my 50K miles oil and filter changes, yes!

        I wasn’t referring to approx ’12 cars/trucks, as “off lease” necessarily, but more like 1st owner, clean 5 year new, or “like new” cars/trucks with a clean carfax and a binder full of maintenance records. Garage kept, non smoker/pets if possible.

        There’s plenty to be had, and plenty to like! Btw I’ll crack open 50K miles used oil filters expecting to find some kind of metal flakes, but no, you wouldn’t know the difference.

        • 0 avatar

          50,000 miles oil oil filter change intervals is pressing the outer limits of deferred maintenance even by Penny Tightwad on BITOG standards.

          I’m not saying it’s not possible, but I’ve seen many vehicles suffer catastrophic failures if their less-than-fastidious owners failed to do oil/oil filter changes over a 20,000 mile duration (whether this was more of an oil or oil filter issue, I do not know, but I do know that in most of these cases, sludge build-up was the primary kiss of death on those enginesP.

          • 0 avatar

            Using a full synthetic, I’m not convinced today’s engines EVER need oil changes. Maybe if it was a GT500 or something (exotic) I’m keeping forever, but on a mainstream car or truck? I’m not wasting my money.

            50,000 mile oil/filter changes may be over-maintaining. If I’m wrong, perfectly good, used engines are too easy to find, even on cars and trucks clearly driven/hammered into the ground.

            Decades ago, cars/trucks typically outlasted their original engines. 100,000+ mile factory engines were the exception, not the rule. Now it’s totally reversed.

          • 0 avatar

            The way some modern motors burn oil, they would run out long before they got that far.

          • 0 avatar

            Yes you might wanna check your oil level, now and again. It’s in the Owner’s Manual. Eventually you add enough oil to equal an “oil change”. So you can’t say it’s the same oil for 50,000 miles anyway.

  • avatar

    That’s what you get in an unsustainable economy.

Read all comments

Back to TopLeave a Reply

You must be logged in to post a comment.

Recent Comments

  • slavuta: macmcmacmac Canada! We get something like 50% of oil imports from Canada
  • Lightspeed: Saw my first one just yesterday, a very handsome car, looks far more expensive than it is. Nice size and...
  • EBFlex: Ford is lying. This amazingly cheap vehicle is not that compelling of a vehicle, offers poor capability...
  • macmcmacmac: If only there was a friendly neighbour nearby you could pipe heavy oil in from.
  • Carlson Fan: “It’s hard to overstate how awesome it is, in more ordinary conditions, to run the climate control...

New Car Research

Get a Free Dealer Quote

Who We Are

  • Adam Tonge
  • Bozi Tatarevic
  • Corey Lewis
  • Jo Borras
  • Mark Baruth
  • Ronnie Schreiber