U.S. car makers reportedly continued to slash sales to daily rental fleets in July as General Motors Co (NYSE: GM), Ford Motor Co (NYSE:F) and Fiat Chrysler Automobiles (NYSE: FCAU) struggled to halt a slide in retail sales during the month.
Figures released Tuesday appear to show July is on track to be the fifth straight month this year in which the annual pace of car and light truck sales declined from the same month a year ago, in part because of fewer fleet sales, analysts and industry executives said. July 2016 sales hit a strong 17.9-million-vehicle pace.
GM said the seasonally adjusted annual sales rate fell to an estimated 16.9 million vehicles in July.
GM sales dropped 15% from a year ago, to 226,107, as the company cut rental fleet sales more than 80%. The automaker said inventories of unsold vehicles at month's end were 104 days, down from 105 days at the end of June. GM has promised investors to reduce inventories to 70 days by year end.
Ford said its July sales dipped 7.5%, to 200,212, as it cut fleet sales more than 26%. Inventories fell to 77 days from 79 the previous month.
FiatChrysler said sales dropped 10%, to 161,477, having cut back sales to daily rental fleets.
The sales slowdown has forced the Detroit Three automakers to idle factories and layoff workers to rein in inventories.
GM, Ford and FiatChrysler have cautioned that second half financial results likely will be lower than first-half results, in part reflecting production cuts in North America and pricing pressures.
The automakers this year have been deliberately dialing back sales to rental car companies, which often generate little to no profit, while struggling to keep retail sales from sagging further, according to industry analysts.
Industry consultant LMC cut its full-year forecast for new vehicle sales to 17 million vehicles. Automakers sold a record 17.55 million vehicles in the United States in 2016. The difference in sales is reportedly equivalent to the output of two large assembly plants.
