Forecasters Believe July 2017 Was the U.S. Auto Industry's Seventh Consecutive Month of Decline

Despite 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.

A 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 Autofocus.ca and the founder and former editor of GoodCarBadCar.net. Follow on Twitter @timcaincars.