Record Drop In Profits For Car Manufacturers | Technology Guide World Record Drop In Profits For Car Manufacturers | Technology Guide World

Record Drop In Profits For Car Manufacturers

  • image

    The U.S. light-vehicle sales slipped 0.5 percent in November as robust fleet shipments by some automakers failed to offset slumping demand for passenger cars.

    But the seasonally adjusted annualized sales rate totaled 17.55 million –  well above forecasts for a 17.3 million sales rate and the second-highest pace of the year.

    This was the fourth decline in industrywide volume over the past five months, signaling the second-half slowdown is continuing but moderating. As the year closes out, the industry is struggling to stay ahead of its 2017 sales pace while automakers back off profit-draining incentives.

    It’s also the first year-over-year November decline since 2009 and another sign of a weakening market, even amid a wave of year-end deals and sales promotions.

    Through October, U.S. light-vehicle sales were up 0.5 percent and are now up 0.4 percent through November. They remain on track for a fourth-straight year above 17 million, extending a record streak above that mark.

    Analysts had expected November sales to come in about 2 percent below year-earlier totals.

    FordToyotaNissan and American Honda posted declines as the industry continued to reel from plunging demand for passenger cars.

    Ford Motor Co. recorded a 7.1 percent overall drop, its third straight monthly decline. Toyota Motor Corp. fell less than a percentage point while America Honda Motor Co. chalked up its biggest setback of the year. Nissan Motor Co. was off 19 percent, dragged down by a staggering 33 percent drop in demand for cars.

    FCA US, meanwhile, rode higher retail and fleet sales to a 17 percent increase, its third consecutive double-digit gain and ninth straight overall.

    General Motors no longer releases U.S. monthly sales results but the Automotive News Data Center estimates the company’s November volume rose 1.4 percent. Bloomberg, citing sources, said GM posted a gain by boosting deliveries to fleet customers.

    Here is how each Company sales analysis

    Ford, sales last month dropped 7.6 percent at the Ford division. Volume rose 3.3 percent at Lincoln.

    Overall, Ford said truck demand slipped 2.3 percent while SUV and crossover sales dropped 4.9 percent. But car deliveries skidded 20 percent and are now down 18 percent for the year.

    Toyota Motor Corp. sales slipped 0.6 percent behind a 17 percent decline in car deliveries that failed to offset an 11 percent gain in light-truck demand. Sales slipped 0.3 percent at the Toyota division and 2.5 percent at Lexus.

    Demand for the Toyota Camry plunged 30 percent and is now down 8.6 percent for the year.

    Nissan Motor Co., volume dropped 22 percent at the Nissan brand but rose 8.1 percent at Infiniti. In addition to slumping car shipments, Nissan’s light-truck sales dropped 8.4 percent as the company continues to dial back on incentives and fleet business.

    American Honda, volume dropped 9.5 percent in November, dragged down by a sharp decline in demand for the Civic and other cars. An 11 percent increase in Acura sales wasn’t enough to overcome an 12 percent decline at the Honda brand. American Honda sales are now down 2.8 percent for the year.

    The November totals included a 30 percent plunge in Civic sales. Its bigger passenger-car sibling, the Accord, managed a 1.6 percent increase for the month but is down 13 percent for the year. Overall, American Honda’s car sales dropped 13 percent and light-truck deliveries fell 7 percent last month.

    Hyundai Motor America sales rose 0.5 percent, with the Hyundai brand up 3 percent but Genesis dropping 77 percent. Kia reported a gain of 1.8 percent.

    Among other automakers, VW brand deliveries dropped 8.3 percent, Mazda dropped 3.8 percent and Subaru sales rose 9.8 percent to 56,782, a record for November, and extending the company’s year-over-year gains to 84 straight months.

    Among other luxury brands, BMW advanced 1 percent, Porsche gained 2.1 percent, Volvo edged up 4.2 percent and Jaguar said it posted its first gain of the year with an November increase of 4 percent. Land Rover volume spiked 26 percent. Mercedes dropped 3.6 percent and Audi volume dropped 11 percent.

    “November’s sales slowdown signifies a new normal that we can expect through at least the end of 2018, and likely into 2019,” said Jeremy Acevedo, manager of industry analysis at Edmunds. “Although sales remain at a healthy level, factors such as increasing market saturation, rising transaction prices and elevated interest rates continue to create headwinds for the industry overall.”

    U.S. sales were up 0.5 percent through October, helped by higher fleet shipments that have offset lower demand from individual customers.

    While falling gasoline prices and healthy payrolls have helped sustain economic growth, rising interest rates, volatile equity markets and trade fears have undermined auto sales, analysts say.


    How do you feel about this drop in sales, is it going to affect us seeing new, high profile exotic cars produced?

    Let us know in the comment box.




    Leave a Reply