This is how auto sales ended up in the NAFTA region during July
Most major automakers reported lower sales in the U.S. market for July after dealerships restrained incentives for the first time in 55 months, according to Bloomberg. Average incentives per vehicle dropped US$ 230 compared with a year ago, according to Ford. Higher interest rates also contributed to the decline, prompting some consumers to opt for lightly used vehicles instead.
According to AutoNews, U.S. auto dealers sold 1.36 million new vehicles last month, a 3.7% decline from July 2017. From January through July auto sales totaled 9.98 million cars and light trucks, which is a figure 1.1% higher than those recorded during the same 7-month period of 2017.
The seasonally adjusted, annualized rate (SAAR) of sales for July fell to 16.73 million, the lowest result since the 16.58-million rate recorded in August 2017, when Hurricane Harvey disrupted sales in the Houston area. There were 24 selling days in the month versus 25 a year ago.
The U.S. market is the main destination for Mexico’s auto exports with 68.1% of total shipments heading to the Northern neighbor during the first quarter, according to the latest figures available from the Mexican Automotive Industry Association (AMIA).
According to Ward’s Auto, Mexico-made vehicles accounted for 14.6% of U.S. auto sales in the first three months of 2018.
Auto dealers sold 114,312 new vehicles in Mexico last month, 6.4% less cars than those sold in July of 2017. This is the fourteenth month in a row with sales decline. Sales from January through July totaled 795,011 units, which represents an 8.1% drop compared to the same seven-month period of 2017, according to figures from the Mexican Association of Auto Dealers (AMDA for its acronym in Spanish).
“Auto dealers keep facing adverse conditions due to the loss of purchasing power by consumers of subcompact cars and rising interest rates,” said Guillermo Rosales, head of AMDA. “We hope that at the end of the year there will be better confidence among consumers to drive up demand and lessen the fall.”
The AMDA estimated its members would marketed 1.45 million units in 2018.
In Canada, auto sales fell for the fifth straight month in July. With total sales for the month at 175,317 light vehicles and a 3.6% decline, it was the largest percentage slide so far this year. Light truck sales declined 1.1% and passenger cars dropped 9.0%.
Year-to-date sales are now down 0.7% to 1,211,994 units with light truck sales increasing 3.3% against a 9.0% decrease in passenger car sales, according to DesRosiers Automotive Consultants (PDF).
Ford Motor Company saw its total vehicle sales in Canada rose 0.9% in July and remained the top seller with 27,918 vehicles sold. Meanwhile, General Motors sales fell 2.4% to 25,226 vehicles.
The largest sales decrease for the month was posted by FCA, down 33.3%. Such decline in volume from one of the three largest automakers was one of the primary contributors to the 3.6% decline in the Canadian market. This decline also solidified General Motors firmly in the second place position in terms of total volume for the month.
Canada is the second most important destination for Mexico’s auto exports with 61,721 vehicles during the first quarter of 2018, accounting for 7.4% of the country’s shipments. However, those figures represent a 5.8% decline if compared to the same period of 2017.