U.S. auto sales fell 5.8% year over year last month, marking the third straight month of declining sales. Clearly, domestic auto demand has plateaued this year after six years of strong growth.

Two of the top three Detroit automakers saw significantly steeper declines in October. Sales fell 11.9% year over year at Ford Motor (F -0.21%). Meanwhile, Fiat Chrysler (FCAU) reported a 10.3% sales drop. Let's take a closer look at how Ford and Fiat Chrysler fared last month to see whether their double-digit sales declines are cause for alarm.

Sales fell 11.9% at Ford last month. Image source: The Motley Fool.

A calendar fluke

First, the overall market decline last month wasn't as bad as it seemed, because there were two fewer selling days than in Oct. 2015. The annualized selling rate -- which strips out the impact of calendar shifts like this one -- came in at a very strong 18.02 million units. That was down less than 1% year over year.

Adjusting for the impact of having fewer selling days, Ford and Fiat Chrysler's sales were down by about 5%-7% last month.

Reducing fleet sales

Pretty much all of that decline can be explained by year-over-year reductions in fleet sales. At Ford, this was mainly a timing issue.

During the first half of 2016, Ford reported huge increases in deliveries to rental car companies. This low-margin "daily rental" business accounted for 13% of Ford's sales through the end of June. At the time, Ford executives stated that full-year daily rental deliveries would be roughly flat compared to 2015 -- the deliveries were just front-loaded this year.

Sure enough, in October, daily rental sales represented just 7% of Ford's total deliveries, down from 10% in the year-earlier period. This implies that daily rental sales plunged nearly 40% year over year. Looking just at retail sales, Ford's deliveries were close to flat on a selling-day adjusted basis.

Ford's retail sales performance was fairly solid in October. Image source: The Motley Fool.

Meanwhile, Fiat Chrysler's total fleet sales declined 23% year over year last month. According to a company spokesperson, Fiat Chrysler has made a strategic choice to move away from its historical dependency on sales to rental car companies. Like Ford, Fiat Chrysler's October retail sales were roughly flat on a selling-day adjusted basis.

Focusing on profitability rather than market share

A few years ago, the auto market was growing quickly enough that automakers could post big sales gains while also expanding their margins. Today, slowing growth has triggered more price competition, creating more of a trade-off between market share and profitability.

Ford and Fiat Chrysler are both wisely focused on maximizing their earnings. For both automakers, that means investing a lot of money into their lucrative truck and SUV franchises while de-emphasizing low-margin car sales. (Many of those cars end up in rental fleets.)

Thus, Fiat Chrysler is phasing out its Dodge Dart and Chrysler 200 cars in order to retool those factories to produce more Jeep SUVs and Ram trucks. Ford is moving production of two compact car models to Mexico in order to restart domestic production and sales of the Ford Ranger midsize truck and Ford Bronco small SUV.

Fiat Chrysler is working to take advantage of strong demand for Jeeps. Image source: The Motley Fool.

Fiat Chrysler's strategy of shifting its attention to the truck and SUV markets is clearly working. Last quarter, the company's operating profit in the NAFTA region rose 8% year over year, even as the company reduced shipments by 8% relative to Q3 2015. Fiat Chrysler expects to continue improving its profit margin in North America over the next two years.

As for Ford, the evidence is mixed. During the first half of 2016, it earned a record pre-tax profit in North America. However, profits began to slip last quarter, and the company expects to post a profit decline in 2017.

That said, most of the near-term pressure on Ford's results comes from the company's efforts to trim dealer inventories. In 2017, the main headwind will be increased spending on long-range projects like self-driving cars and electrified vehicles. Those investments will hopefully pay off a few years down the road.

Outperforming the market this year

Perhaps the biggest reason why Ford and Fiat Chrysler investors shouldn't panic about the double-digit sales declines last month is that both automakers' U.S. sales are up year to date, modestly outpacing the broader market. A month or two of subpar sales does not equal a trend.

As Ford and Fiat Chrysler shift their production toward trucks and SUVs in the next few years, they should be able to maintain a healthy share of the U.S. auto market without damaging their profitability through excessive discounting.