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U.S. auto sales fall in July, as Detroit dials back on inventory, rental sales

DETROIT — U.S. carmakers said on Tuesday they continued to slash low-margin sales to daily rental fleets in July as General Motors, Ford and Fiat Chrysler Automobiles struggled to curb a slide in retail sales. July is on track to be the fifth straight month 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. At midmorning on Tuesday, GM shares were down 3.4 percent at $34.77, Ford was down 2.8 percent at $10.91, and Fiat Chrysler shares were down 0.3 percent at $12.05 in New York. GM sales dropped 15 percent from a year ago to 226,107 vehicles, as the company cut rental fleet sales more than 80 percent. 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 percent to 200,212 vehicles, as it cut fleet sales more than 26 percent. Inventories fell to 77 days from 79 the previous month. Fiat Chrysler said sales dropped 10 percent to 161,477, as it also cut back sales to daily rental fleets. Among the top Japanese companies, only Toyota reported a year-to-year gain, with sales up 4 percent to 222,057 — just 4,000 units behind GM. Honda sales were down 1 percent to 150,980 — its first-quarter sales continuing to decline in North America but seeing a big increase in China. And Nissan sales fell 3 percent to 128,295. GM, Ford and Fiat Chrysler 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.

Federal judge orders Barra and Manley to try to resolve GM racketeering lawsuit

DETROIT — A federal judge in Detroit on Tuesday ordered the chief executives of automakers General Motors and Fiat Chrysler Automobiles to meet by July 1 to try to resolve GM's racketeering lawsuit. U.S. District Court Judge Paul Borman called on GM CEO Mary Barra and FCA CEO Mike Manley to meet in person to try to resolve a case that could drag on for years. "What a waste of time and resources now and for the years to come in this mega-litigation if these automotive leaders and their large teams of lawyers are required to focus significant time-consuming efforts to pursue this nuclear-option lawsuit if it goes forward," Borman said at the end of a hearing during which FCA asked the judge to dismiss GM's lawsuit. Borman said instead, the companies need to focus on building cars and keeping people employed at a time when the coronavirus has hurt the U.S. economy and the country is also dealing with issues of racial injustice after the death of George Floyd, a Black man whose death in police custody in Minneapolis triggered worldwide protests. GM filed the racketeering lawsuit against FCA last November, alleging its rival bribed United Auto Workers (UAW) union officials over many years to corrupt the bargaining process and gain advantages, costing GM billions of dollars. GM is seeking "substantial damages" that one analyst said could total at least $6 billion. Barra and Manley should meet, taking into account social distancing to keep them safe, to "explore and indeed reach a sensible resolution," Borman said in the hearing, which was broadcast online. It is common for judges to order parties to try to resolve disputes out of court. But it is unusual that the chief executives of two big companies be instructed to meet face-to-face, not just to settle their differences but also to serve a greater good. A GM spokesman said the No. 1 U.S. automaker has a strong case and "we look forward to constructive dialogue with FCA consistent with the courtÂ’s order.” FCA had no immediate comment. Borman said he wanted to hear from Barra and Manley personally at noon on July 1 to provide him with results from their discussion. FCA shares were up 6.1% at $10.24 in New York and GM shares were down 0.5% at $26.25 on Tuesday afternoon. Government/Legal Chrysler Fiat GM

Mystery shoppers love Infiniti, hate Tesla

Infiniti, followed by Lexus tied with Mercedes-Benz took the top two spots for best sales experience according to mystery shoppers from the latest Pied Piper Prospect Satisfaction Index, while EV manufacturer Tesla recorded the lowest overall score. Not surprisingly, premium brands dominated the top ranks. Including the three already mentioned, luxury brands occupied seven of the top ten spots and included Audi, BMW, Porsche, and the only American brand to crack the upper echelon, Cadillac. Toyota, Volkswagen, and Nissan rounded out the first ten positions. The news for domestic automakers isn't good. Aside from Caddy, the only other star-spangled automaker to score above the industry average is Chrysler. The rest of FCA, most of GM, and all of Ford fell below the line. But Pied Piper's mystery shoppers handed Tesla the biggest walloping – the company is ten full points below the next lowest brand, Volvo, and its score of 86 is 17 below the average of 103. It's baffling, considering the company's touted direct-sales model. "Tesla leaves me scratching my head," Fred O'Hagan, Pied Piper's president and CEO, told Wards Auto. "They own all of their stores, so you would think each one would be doing the same thing. But they're not. Tesla is consistent in its inconsistencies." O'Hagan added that there's a "huge variation" in Tesla's store-to-store effectiveness, and that in some cases, shoppers found showroom workers that acted more like "museum curators," Wards Auto reports. It might be popular to call Tesla the Apple of the car world, but based on Pied Piper's work, the brand has a long way to go to emulate the uniform shopping experience of an Apple Store. The news might be bad for Tesla, but even for the brands that scored below average, there's cause for celebration. Only Tesla and Mini lost points in this year's rankings, and only Mercedes and Lincoln held steady. Every other brand, including Infiniti, which topped the index for the first time, gained at least one point. The biggest improvements belong to Porsche, Land Rover, and Mitsubishi, which all jumped five points. Pied Piper's annual Prospect Satisfaction Index uses mystery shoppers – over 6,100 this year – from across the country to assess dealers and generate rankings from over 50 individual factors. News Source: Pied Piper via WardsAuto Green Audi BMW Cadillac Chrysler Infiniti Lexus Mercedes-Benz Nissan Tesla Toyota Car Buying Car Dealers study