Companies curb discounts on leases and sales to rental fleets
2017 Ford Fusion vehicles on display at a dealership in Illinois. Photo: Daniel Acker/Bloomberg News
Auto sales slid in July, the seventh month of a slowdown marked by manufacturers’ reluctance to sell discounted cars through leases and car-rental chains.
Sales fell 7% last month, compared with a year earlier, according to Autodata Corp. Research firm J.D. Power said manufacturers typically pull back on sales incentives after the July Fourth holiday, “but this year elevated inventory levels coupled with the sales slowdown, have compelled them to maintain aggressive discounts throughout July.”
Detroit’s car companies felt the brunt of the decline, with General Motors Co.reporting a 15% sales drop in July compared with the same period a year earlier. Sales at Ford Motor Co. F -2.41% and Fiat Chrysler Automobiles NV slid by 7.4% and 10%, respectively. All three were below analysts’ expectations.
Despite falling sales, the three companies aimed to protect their bottom lines by trimming incentives for car leases. Auto makers have banked on such discounts to keep consumers’ monthly payments low as sticker prices soared because of a market shift to heavier trucks and sport-utility vehicles, and technology aimed at making cars smarter, safer and more efficient.