Cars and Drivers
America's Biggest Car Companies Falter in June
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The car industry has held up better than many experts thought it would this year. In 2018, sales topped 17 million annually for the fourth year in a row. However, sales have become shaky this year, and June may be among the first signs of a downturn. Not all car companies have been affected equally. America’s two largest car companies are expected to have a rough month.
Cox Automotive, which tracks U.S. car sales trends, says car sales will slip 2.7% in June from the same period of last year to a total of 1.51 million across all manufacturers. Cox experts commented: “June is expected to return to a more modest market after surprisingly strong sales in May.”
The two biggest American car companies will be hit the hardest. Ford Motor Co. (NYSE: F) sales are expected to drop 5% to 218,000 compared to June of last year. Ford continues to suffer the effect of slow car sales, which has caused it to stop selling many of its car nameplates in the United States. Sales of its highly popular F-150 pickup have been essential and have stayed strong this year. General Motors Co.’s (NYSE: GM) sales are expected to drop by 5.1% in June to 242,000. Cox estimates sales results for GM and Ford because the companies no longer provide monthly figures.
Several other larger manufacturers that sell cars in the United States are expected to experience problems in June. Toyota Motor Corp. (NYSE: TM), the largest foreign manufacturer, is expected to post sales of 203,000, down 3.1% year over year. It continues to challenge Ford for the number two spot in overall U.S. sales. American Honda’s sales are expected to drop 1% to 145,000. Fiat Chrysler Automobiles N.V. (NYSE: FCAU) sales are expected to fall 2.1% to 198,000. Nissan sales are projected to decline by 8.3% to 133,000.
Some of the smaller, niche manufacturers are expected to have a strong month. Volkswagen continues to rebound from its diesel engine scandal of 2015, which nearly wiped out its sales in America. VW’s sales are expected to rise 3.2% in June, compared to the same month a year ago, to 55,000. Its total sales will continue to be blunted by a limited number of models, particularly compared to the lineup in its home market in Europe.
Subaru continues to show strength in sales month after month, a trend that goes back three years. Its sales are expected to rise by 3.6% to 62,000. Some of its models are so hot that they are often out of stock.
South Korea’s car duo Kia and Hyundai are expected to rise 3.6% to 125,000. Hyundai recently launched its new Genesis luxury brand as a separate model line.
Cox warned that a weak economy could throw off car sales, although it acknowledged that low unemployment and the current GDP are unlikely to seriously threaten sales soon. Its reaction to the recent past and near-term future was this: “A harsh winter, tax reform uncertainty and tariff threats have all contributed to an unpredictable monthly sales pace so far.” Some manufacturers will be affected because they sell cars Americans don’t want to buy.
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