(Reuters) - Major automakers on Tuesday posted mixed U.S. sales results for June and the second quarter, with demand still fairly strong for SUVs and pickup trucks while passenger car sales continued a long-running decline.
In the pickup truck segment, Fiat Chrysler Automobiles NV’s (FCA) (FCAU.N) (FCHA.MI) Ram outsold General Motors Co’s (GM.N) Chevrolet Silverado in the second quarter. GM reports sales on a quarterly instead of monthly basis.
The Silverado has long held second place behind Ford Motor Co’s (F.N) F-Series pickup trucks, with Ram often a distant third. But so far in 2019, FCA’s sales of Ram pickups have outpaced Chevy Silverado sales by more than 40,000 vehicles.
FCA, GM and Ford escalated a price war in June over pickup trucks - one of few vehicle market segments offering substantial profits, which matters at a time when overall U.S. new-vehicle sales are expected to fall this year.
High interest rates, plus competition from millions of nearly new, off-lease vehicles have translated into fewer consumers splurging on new cars. After a weak start to the year, sales in the last couple of months have been largely flat versus 2018.
“The market is not as down as it was to start off the year, which says a lot about market stability,” said George Augustaitis, director of industry analysis at CarGurus Inc, an online marketplace for new and used cars. “At this point, a Fed interest rate cut could be the thing that sparks the industry.”
There have been growing expectations that the Federal Reserve will cut interest rates this year, possibly as soon as at the central bank’s next policy meeting at the end of July, although Fed officials last week pushed back on those expectations.
FCA said its sales rose 2% in June, driven by a 56% jump in Ram sales.
“This type of year-over-year growth is likely not sustainable in the short term, however, calendar-year-to-date, our pick-up truck sales are up 28%,” FCA U.S. sales chief Reid Bigland said in a statement. “As a result I do feel that double-digit truck growth is achievable well into the future.”
GM said second-quarter sales fell 1.5%, with strong sport utility vehicle sales offset by poor performance for its pickup trucks. The No. 1 U.S. automaker said sales of trucks would pick up in the third quarter as both its most popular and most affordable versions of the Silverado will hit dealer showrooms.
Ford, which like GM reports sales quarterly, saw its sales fall 4.1% in the second quarter, with retail sales to consumers down more than 8%, according to auto industry data.
Toyota Motor Corp (7203.T) reported a 3.5% drop in sales for June, led by falling sedan sales.
In the last few years, Americans have increasingly shunned passenger cars in favour of larger, more comfortable SUVs and pickup trucks.
Nissan Motor Co Ltd’s (7201.T) sales plunged nearly 15%, with huge drops for much of its lineup including the best-selling Rogue SUV. After years of relying on steep discounts to increase U.S. market share, Nissan is trying to pull back so it can sell vehicles more profitably.
Billy Hayes, Nissan’s North American vice president for sales, said many of the automaker’s models will be revamped in the next year or two, which will help lift sales.
Hyundai Motor Co (005380.KS) on Tuesday reported a 1.5% rise in U.S. sales for June, lifted by strong demand for SUVs and trucks.
Reporting by Ankit Ajmera in Bengaluru and Nick Carey in Detroit; Editing by James Emmanuel, Matthew Lewisand Leslie Adler