"It wasn't exactly a blockbuster month in August, so that puts extra pressure on the industry to step up its game in September, especially this coming Labor Day weekend," said Edmunds.com analyst Jessica Caldwell in an email.
Indeed, August was no blockbuster: Industry sales fell 3.5% and the seasonally adjusted annual sales rate (SAAR) dropped to 16.97 million, the third lowest rate of the year. There are a couple of factors to consider, though. Despite August having the same total number of selling days compared to the prior year, this August had one fewer weekend, which likely hindered sales (much of auto sales traffic comes on weekends). This August also featured fewer blockbuster summer sales deals, which made for tough comparisons, as last year's August was a strong month.
With all of that in mind, let's dig into the highlights from Ford Motor Company (NYSE:F), which posted a 8.4% decline; Fiat Chrysler Automobiles (NYSE:FCAU), which posted a rare August gain; and General Motors (NYSE:GM), which was somewhere between its two Detroit competitors.
Ford: Sales down 8.4% to 214,482 units
There's no denying it was a rough month for Ford's sales. Fleet sales were down 10%, which in a way is a good thing, because Ford's fleet sales were elevated through the first half of the year, but it comes at a rough time, as its retail sales also declined a significant 8%.
Driving much of the decline was Ford's passenger car segment, which boasted only one nameplate with a sales gain over last August -- and that was the police interceptor sedan, which isn't a good reflection of consumer demand. The other six passenger cars all posted double-digit declines, with the smallest decline being 16.1% and the largest 32.6%. The total segment decline was a brutal 26.5% during August, more than double the segment's year-to-date decline of 11.3%.
But there were a couple of bright spots for Detroit's second-largest automaker. Lincoln sales increased 7% last month thanks to the MKZ continuing its strong performance, and the MKX continuing to surge with the new model. Sales of the MKX were up nearly 50% last month, and are up 56.5% year to date.
Thanks in part to Lincoln's sales gains, as well as strong SUV and truck sales, Ford's average transaction price was $1,200 higher last month compared to the prior year, outpacing the industry average, according to Ford.
General Motors: Sales down 5.2% to 256,429
Similar to crosstown rival Ford, General Motors' sales declined in the retail segment, but remained flat in the fleet segment. GM's retail sales declined 5% while its fleet sales remained flat at 17% of total sales. GM also saw a significant increase in average transaction prices.
"Despite tighter dealer inventories, we had a solid retail performance in August led by Chevrolet, which gained retail share in eight different segments," said Kurt McNeil, U.S. vice president of sales operations, in a press release. "Our retail strength is reflected in our record ATPs [average transaction prices] in August, which were up more than $1,600 from last month and nearly $5,800 above the industry average while our incentive spending was below the industry average and well below [that of] our domestic competitors."
More specifically, GM's ATPs were $36,730 in August, which, as McNeil points out above, was pretty impressive. GM's incentive spending as a percentage of average transaction prices was 11.1%, roughly 40 basis points below the industry average.
Breaking it down by brand: Only Cadillac managed to post a year-over-year sales gain, with a 3.9% rise. Chevrolet posted a 3.9% decline, while GMC and Buick posted respective declines of 14% and 2.7%. Another noteworthy takeaway was the sales gains and declines of four of GM's valuable truck models. GM's midsize trucks continue to sell well, with the Chevy Colorado and GMC Canyon posting 29.9% and 38.8% gains in August, respectively. While its full-size trucks sell at a much higher volume, the sales hit a speed bump in August with the Chevy Silverado and GMC Sierra declining 4.7% and 17.7%, respectively.
Fiat Chrysler Automobiles: Sales up 3% to 196,756
FCA held true to its theme over the past couple of years: Jeep and Ram truck brands haul the sales totals higher. Jeep's brand sales were up a fairly impressive amount, considering the industrywide decline -- 12% compared to the prior year. Part of that was certainly driven by the Jeep Cherokee, which posted a 41% rise in sales last month, easily the largest percentage increase of any Jeep model last month. However, the Jeep Grand Cherokee, Patriot, and Compass all managed to turn in double-digit gains during August. The only Jeep model to post a decline last month was the Wrangler, down 16%.
FCA's Ram Truck brand managed to post a meager 2% gain in August, which is still a small victory considering Ford's F-Series and GM's Silverado posted respective declines of 6% and 5%. However, with sales of the Ram pickup flat year over year, the brand's saving grace last month was its ProMaster Van, which posted a 25% gain compared to the prior August.
The rest of FCA's lineup turned out as expected, with Chrysler and Fiat continuing to tank. Chrysler's sales were down 22% in August, mirroring the brand's 22% decline for the full year. The Fiat brand posted a similar 21% decline last month, which accelerated from its year-to-date decline of "only" 17%. Dodge, on the other hand, was able to record a 5% gain in August on the back of its Journey model's 40% gain.
No, as Caldwell said, it wasn't a blockbuster month for the industry. However, that's what investors should come to expect over the next couple of years, as sales have plateaued near record highs. Rather than focusing solely on year-over-year comparisons, investors should put more of an emphasis on incentive spending compared to average transaction prices. If major automakers avoid an incentive war to chase market share and volume, the U.S. market should remain highly profitable for the near term regardless of whether sales take a slight dip.