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Major automakers post mixed US June sales figures

General Motors, Ford and Fiat Chrysler Automobiles NV posted declines in US new vehicle sales for June on Monday, while major Japanese automakers reported stronger figures. Once again, demand for pickup trucks and crossovers offset a decline in sedan sales. Automakers' shares rose as overall industry sales still came in above Wall Street expectations. The US auto industry is bracing for a downturn after hitting a record 17.55 million new vehicles sold in 2016. Analysts had predicted that overall, US vehicle sales would fall in June for the fourth consecutive month. As the market has shown signs of cooling, automakers have hiked discounts and loosened lending terms. Car shopping website Edmunds said on Monday the average length of a car loan reached an all-time high of 69.3 months in June. "It's financially risky, leaving borrowers exposed to being upside down on their vehicles for a large chunk of their loans," said Jessica Caldwell, Edmunds' executive director of industry analysis. GM said its sales fell about 5 percent versus June 2016, but that the industry would see stronger sales in the second half of 2017 versus the first half. "Under the current economic conditions, we anticipate US retail vehicle sales will remain strong for the foreseeable future." GM shares were up 2.4 percent in morning trading, while Ford rose 3.3 percent and FCA shares jumped 6 percent. "US total sales are moderating due to an industry-wide pullback in daily rental sales, but key US economic fundamentals clearly remain positive," said GM chief economist Mustafa Mohatarem. "Under the current economic conditions, we anticipate US retail vehicle sales will remain strong for the foreseeable future." Ford said its sales for June were hit by lower fleet sales to rental agencies, businesses, and government entities, which fell 13.9 percent, while sales to consumers were flat. But it sold a record 406,464 SUVs in the first half of the year, with Explorer sales increasing 23 percent in June. And sales of the F-150 had their strongest June since 2001. On a media call, Ford executives said an initial read of automakers' sales figures indicated a seasonally adjusted annualized rate of around 17 million new vehicles for the month, which would be better than 16.6 million units analysts had predicted. FCA said June sales decreased 7 percent versus the same month a year earlier.

332,000 Jeep, Fiat and Alfa Romeo models recalled over faulty seat belt buckle sensors

Stellantis has recalled 332,000 Alfa Romeo, Jeep, and Fiat vehicles in the United States due to faulty seat belt sensors. Included in the recall are certain 2017-2024 Alfa Romeo Giulia and 2018-2025 Stelvio models along with 2019-2023 Fiat 500X, Jeep Renegade, and 2024 Fiat 500E models. According to documents posted by the National Highway Traffic Safety Administration, "A disrupted connector on the buckle switch hall effect may affect the conduction on the connectors of the seat wiring and buckle which may cause the front seat air bag to not perform as expected during a crash." In more simple terms, the sensor that tells the vehicle's onboard computer if an occupant's seat belt is buckled may fail. If this happens, an airbag may not inflate in the event of a crash as intended. As of June 26, 2024, Stellantis says it has identified 578 field reports in North America potentially related to this issue. "The remedy will be to replace the connector by directly wiring the sensor to the harness with a solder tube," according to documentation provided by Stellantis. All repairs will be made free of charge.

FCA: PSA deal terms still intact despite dividend cut report

MILAN - Fiat Chrysler (FCA) said the terms of its merger with France's PSA had not changed after an Italian newspaper report that it was looking to spin off assets to reduce a planned 5.5 billion euro ($6.2 billion) cash pay-out to its shareholders. FCA said on Friday that it was sticking to the deal agreed with PSA in December before the coronavirus crisis hit demand for cars. "The structure and terms of the merger are agreed and remain unchanged," a spokesman for the Italian-American automaker said. FCA and PSA plan to finalise their merger by the first quarter of next year. PSA declined to comment. Italian business newspaper Il Sole 24 Ore said that FCA could conserve cash by reducing the special dividend, possibly by handing shareholders assets as compensation. Il Sole reported that talks were at a very early stage and no decision had been taken, adding the that aim was to keep the 5.5 billion euro value of the special dividend but to turn its "nature" from cash to assets. FCA, has just agreed a 6.3 billion euro state-backed loan to help its Italian unit and the whole country's automotive industry to weather the crisis. Although this does not bar FCA from paying the dividend, as it is not due until 2021 and would be paid by Dutch parent company Fiat Chrysler Automobiles NV, Italian politicians have called into question such a large cash pay-out. Options being considered include spinning off the Sevel van business, a 50-50 joint venture between the two groups, or FCA's Alfa Romeo and Maserati brands, Il Sole said. Sevel, which produces vans in Atessa's plant in central Italy, Europe's largest van assembly facility, could be valued between 2.5 and 3 billion euro, Il Sole said. Its spin-off to FCA shareholders could also help address European Union concerns about the merger's consequences on competition in the van segment. This option looks however complicated, Il Sole said, as it would require PSA transferring its 50% stake in Sevel to FCA. Another option is scrapping a planned spin-off of PSA's controlling stake in parts maker Faurecia, Il Sole said. A source close to the matter said that PSA could instead sell its Faurecia stake before the merger and keep the cash proceeds of the sale within the new merged company. ($1 = 0.8899 euros; additional reporting by Sarah White in Paris; editing by Alexander Smith)