Call it a summer slowdown in the showroom. Automakers are reporting much weaker-than-expected sales for the month, with some companies posting double-digit declines in business.
General Motors sales fell 15.5 percent compared to July of last year when industry sales were close to a record high. While some of the decline at GM can be attributed to a deliberate pullback in fleet sales to rental car companies, the automaker's retail sales at dealerships was almost as weak, falling 14.4 percent.
Meanwhile, Fiat Chrysler also saw a big drop in business last month, with sales falling 11 percent, far worse than the Edmunds.com estimate of a 7 percent decline. Ford was also weaker than expected, with a 7.4 percent drop in sales.
One reason for the decline is a drop in demand for trucks and SUVs, which have remained relatively strong even as the overall market has slowed down.
For example, Jeep sales fell 12.3 percent in July. GMC retail sales fell 9.3 percent, and Ford truck sales were down 7.1 percent.
As sales have slowed down, inventories have risen. General Motors ended the month with almost 940,000 vehicles in its inventory, or 104 days supply, well above the industry's traditional target of 65-70 days supply. GM blames some of that higher inventory on the automaker's plan to build more pickup trucks in the first half of the year to meet demand later this year when it shuts down pickup assembly lines to transition to new models.
Still, dealers across the industry are struggling to move new models as quickly as they would like. In July, it took an average of 76 days to "turn," or sell, a new vehicle. That is the highest days-to-turn rate since July of 2009 when industry sales were plunging due to the recession.
"In today's declining market, every sale counts," Caldwell said. "We anticipate automakers will continue to ramp up zero-percent finance offers as we get deeper into the summer sell-down season," said Jessica Caldwell, Edmunds executive director of industry analysis.