August 2016 Industry News & Notes: Ups, Downs & Brexit Challenges

A dose of reality was injected into a year that started off with record profits for Ford Motor Co. as a combination of increased incentive spending and softening vehicle demand overseas began to turn up the pressure. After a 9% decline in net income in the 2nd quarter Ford CEO Mark Fields remarked, “We remain committed to our 2016 guidance, but we’re facing risks to achieving that.” Ford also expects to take at least a one billion dollar hit in Europe over the next 3 years as a result of the Brexit vote.

July Sales was a mixed bag. Sales were flat overall as a sustained demand for light trucks helped offset softening sedan sales. Concerns about a market that may have hit its plateau are growing after six straight years of steady growth. There were some ups…and some downs. More July mixed bag notables:

• Hyundai Tweeted that July was an all time best sales month – 75,004 units sold.

• 2 percent of new-vehicle loans were financed with a zero percent interest rate compared to 12.9 percent in July 2015.

• Sales at Nissan rose 1.7 percent in July, with a record 57,794 crossover, SUV and truck sales.

• July sales were off 8.1 percent compared to July 2015 for Volkswagen Group of America – it’s likely they’re feeling the effects of the diesel emissions scandal.

• Some analysts predict that the expected increase in off-lease vehicles will push used vehicle prices lower and may also undermine new vehicle sales in the coming months.

• Sales were up 4.8 percent at GMC, 10 percent at Buick and 1.3 percent at Cadillac. GM reported a 5 percent bump in retail volume to 236,235 vehicles.

• American Honda reported an all-time monthly record of 77,740 truck sales. Honda Division sales rose 5.9 percent to a July record of 139,125 vehicles. Acura sales fell 8.3 percent.

• Toyota brand sales slipped 2 percent, while Lexus sales dropped 6.5 percent.

• Audi recorded its 67th straight month of year-over-year sales increases with a 4 percent uptick in July to 18,364 vehicles.

• While some analysts believe low interest rates and cheap gasoline combined with rising lease penetration will continue to spur growth, others believe pent-up demand has largely been exhausted and things will begin to cool. Sounds like a mixed bag.