Listen to the John Batchelor radio show about this story by clicking on the link
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Why were auto sales down in August, Matt? I asked the guy painting my house, “vacations, everyone is on vacation, and they are getting ready for their kids to go back to school.” He’s right. He was right about the color of the paint too.
August is known for being a lackluster month when it comes to jobs and auto sales. It’s partially the reason companies have labor day sales, to make up for the bad August sales month. August wasn’t terribly bad for automobile sales, but the industry was down about three percent.
Matt and his family are the quintessential buyers. Matt’s wife is looking for a new SUV to buy. Matt owns a pickup for his work; Amber wants an SUV to get her to work and to haul the family. I suggested the 2017 Chrysler Pacifica minivan and was met with a resounding NO! How about a sedan, I asked. An even more emphatic NO! Matt and Amber want an SUV.
SUVs are hot. If it weren’t for SUVs, there would be no market. Americans are growing, and gas is getting cheaper which are probably the two biggest reasons for SUVs to be doing so well.
According to TrueCar, Inc. (NASDAQ: TRUE) U.S. revenue from new vehicle sales will reach $50 billion for the month of August, down 1.7 percent from a year ago. Despite higher average transaction prices, automakers should post an $866 million loss in revenue compared to last year. Why? Manufacturers and car dealers are tightening up on the incentives for vehicles. The August incentive spend will likely down by 17.4 percent compared to last year.
The biggest losers for August are the companies that only have cars; Alfa Romeo (down 62%), Chrysler (down 22%), Fiat (down 21%) and Smart (down 42%). The biggest winners are the companies with hot new SUVS; Jaguar brought out their smart looking F-Pace and they are up year-over-year 188%. Volvo brought to market their XC 90 and sales for that company soared 31%.
CNBC gave the numbers for Car Sales in August, and they weren’t pretty;
* Ford Car Sales in August were down 26.9 percent while the brand itself was down –9.4%. Lincoln gained in year-over-year because of its SUVS.
* Nissan Car Sales in August were down 25.4 percent while the brand itself was down –6.9%. Infiniti was down 1.8%, but they also sell cars.
* Toyota Car Sales in August were down 12.5 percent, while the brand itself was down 5.6%.
* Honda Car Sales in August were down 11 percent, but because of the pickup and SUVs the brand was only down 3.5%, while Acura was down 7.0%.
Luxury vehicles are still doing well; Bentley was up 75%, Rolls-Royce was up marginally at 4.1%, but that will change with the new Dawn coming out. Cadillac has a couple of new SUVs coming out, and they are up 3.9%. CNBC noted that sales of the Toyota Prius were down 26% for 2016 year to date.
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In 1939 General Motors sponsored “Futurama: Highway & Horizons” One hundred years later most companies agree that there will be automated cars on the highway that can deviate from their lanes and overtake other vehicles.
The US is currently leading in automated cars when you Combine the legislative framework and the sales of vehicles that have high end automated driving assistance features. Of course, you also have to take into account the large amount of vehicles sold in the United States.
The United States is currently in the lead position for automated vehicles with Germany coming in a strong second place. The legislation is the key here, and the National Highway Traffic Safety Administration (NHTSA) is taking the lead. The Department of Transportation Secretary, Anthony Foxx, has been at numerous auto show and the Consumer Electronics Show (CES) touting NHTSA’s involvement in Vision Zero fatalities.
Google seems to be the leader in the autonomous race, but with the departure of Chris Urmson that might change, depending on where he lands. Audi is hot on autonomous vehicles, having driven Jack the Audi A7 from California to Nevada for the 2016 CES show. Next year’s CES show will be even more indicative of which company, country and car is winning the autonomous race.