Coverage: Auto sales fell in September

Auto sales, after six years of strong growth, fell in September even though dealers increased financial incentives to potential buyers.

Nathan Bomey of USA Today has the news:

September vehicle sales declined 0.5% to 1.44 million units, reflecting an annualized selling rate of 17.76 million vehicles, according to Autodata. With one quarter to go, the industry is expected to nearly match 2015’s record performance of 17.5 million vehicles sold during the year.

Also, September’s dropoff wasn’t as bad as had been projected by analysts at Edmunds.com, Kelley Blue Book and TrueCar.

Average discounts per vehicle rose 7.8% to $3,387, compared to a year earlier, according to TrueCar. That reflects what auto executives say is rising competition for market share in a trend that could erode profits.

Still, job gains, income growth and rising consumer confidence mean it’s “still a great business environment to be in,” Toyota U.S. sales chief Bill Fay said in a conference call. “2016 is shaping up to be another great year for the auto industry.”

Jamie Butters, Keith Naughton and John Lippert of Bloomberg noted that truck sales remain strong:

Fiat Chrysler reported a decline of 0.9 percent, compared with the average estimate for a drop of 5.1 percent. Sales of all of its brands fell in September, except the Ram Truck line, which jumped 27 percent. Ram pickup sales rose 29 percent.

Ford, which enjoyed elevated fleet sales in the second half of 2015 and first half of this year, sold 203,444 cars and light truck in September, matching analysts’estimates for an 8 percent drop. Ford’s car sales fell 21 percent, while its top-selling F-Series pickups declined by 2.6 percent and SUV sales dropped 3.4 percent. Ford said its retail sales to individual customers fell 4 percent in September, while sales to fleet customers, such as rental car agencies, declined 21 percent.

GM’s ATPs, which reflect retail transaction prices after sales incentives, were $35,804 in September, almost $5,000 above the industry average and approximately $1,000 above last September’s performance.

Nissan Motor Co. sold 127,797 cars and light trucks in the U.S. last month, a 4.9 percent gain from a year earlier. That compares with the average analyst projection of a decrease of 1.4 percent, as pricey sport utility vehicles continue to move off dealer lots. Sales of the Murano SUV rose 46 percent, and the popular Rogue was up 5.6 percent.

Dee-Ann Durbin and Tom Krisher of the AP report that the used-car market is affecting new car sales:

Cars have been particularly hard hit as low gas prices have made SUVs and trucks even more appealing. Brands without competitive new SUVs are struggling; Fiat, for example, saw its sales plummet 30 percent last month.

New cars also are feeling pressure from used cars because of the growing popularity of leasing. More than 30 percent of new vehicles are now leased, up from 20 percent five years ago. Around 500,000 off-lease vehicles are returning to the used car market this year and next year, and many consumers will choose them instead of new vehicles, says Alec Gutierrez, a senior market analyst with Kelley Blue Book.

That has automakers pushing harder for sales. Incentive spending hit a record of $3,923 per vehicle last month, surpassing the previous high set in December 2008 during the recession.

BMW was offering $6,732 in incentives per vehicle in September, up 44 percent from a year ago, according to TrueCar.com. Fiat Chrysler spent $4,302 per vehicle on deals, up 23 percent. Buyers could get $4,500 cash back on a 2016 Ford Escape or $2,000 on a 2017 Chevrolet Malibu.