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Trucks, SUVs drive U.S. October new vehicle sales

DETROIT — Major automakers posted mixed U.S. new vehicle sales in October on Wednesday, though America's love affair with high-margin pickup trucks and SUVs remained in full bloom as larger, pricier vehicles fared better than passenger cars. Auto industry publication WardsAuto put the seasonally-adjusted annualized rate (SAAR) for light vehicle sales in October at a robust level of 18 million units. But after a long boom cycle, carmakers are still ill-prepared for the slight decline in sales anticipated for full-year 2017 and have taken too few steps to trim production, said Doug Mehl, a partner in consultancy A.T. Kearney's automotive practice. "When you make a new vehicle, you have volume assumptions tagged to it, and who wants to be the guy who says, 'I'm going to make less of this really cool model'?" Mehl said. "But eventually the market is the reality, and it's going to force companies one way or other here." General Motors GM reported a sales drop of 2.2 percent for the month, with consumer sales down 6.6 percent. But sales of high-margin pickup trucks, sport utility vehicles and crossovers all rose. GM also cut its inventory of unsold vehicles — a source of concern for the market — slightly. The automaker has worked to reduce its volume of excess inventory, including through significant production shutdowns in the third quarter. GM had said its inventory would rise in October. "We are heading into the fourth quarter with good momentum, thanks to a strong U.S. economy and very strong pickup and crossover sales," said Kurt McNeil, GM vice president for U.S. sales operations. GM slightly reduced consumer discounts as a percentage of average transaction prices to 13.5 percent, from 13.7 percent in the third quarter. Industry experts believe consumer discounts above 10 percent of the average transaction price are unhealthy as they erode resale values and are unsustainable in the long term. Consultants J.D. Power and LMC said last week that based on preliminary October sales numbers, discounts have exceeded 10 percent in 15 of the past 16 months. Ford The U.S. auto industry posted record sales of 17.55 million vehicles in 2016. New sales received a strong boost in September as consumers replaced vehicles damaged in southeast Texas by Hurricane Harvey the previous month. Full-year 2017 sales are expected to be slightly lower than 2016.

The next steps automakers could take after sales drop again in April

DETROIT (Reuters) - Major automakers on Tuesday posted declines in U.S. new vehicle sales for April in a sign the long boom cycle that lifted the American auto industry to record sales last year is losing steam, sending carmaker stocks down. The drop in sales versus April 2016 came on the heels of a disappointing March, which automakers had shrugged off as just a bad month. But two straight weak months has heightened Wall Street worries the cyclical industry is on a downward swing after a nearly uninterrupted boom since the Great Recession's end in 2010. Auto sales were a drag on U.S. first-quarter gross domestic product, with the economy growing at an annual rate of just 0.7 percent according to an advance estimate published by the Commerce Department last Friday. Excluding the auto sector the GDP growth rate would have been 1.2 percent. Industry consultant Autodata put the industry's seasonally adjusted annualized rate of sales at 16.88 million units for April, below the average of 17.2 million units predicted by analysts polled by Reuters. General Motors Co shares fell 2.9 percent while Ford Motor Co slid 4.3 percent and Fiat Chrysler Automobiles NV's U.S.-traded shares tumbled 4.2 percent. The U.S. auto industry faces multiple challenges. Sales are slipping and vehicle inventory levels have risen even as carmakers have hiked discounts to lure customers. A flood of used vehicles from the boom cycle are increasingly competing with new cars. The question for automakers: How much and for how long to curtail production this summer, which will result in worker layoffs? To bring down stocks of unsold vehicles, the Detroit automakers need to cut production, and offer more discounts without creating "an incentives war," said Mark Wakefield, head of the North American automotive practice for AlixPartners in Southfield, Michigan. "We see multiple weeks (of production) being taken out on the car side," he said, "and some softness on the truck side." Rival automakers will be watching each other to see if one is cutting prices to gain market share from another, he said, instead of just clearing inventory. INVESTORS DIGEST BAD NEWS Just last week GM reported a record first-quarter profit, but that had almost zero impact on the automaker's stock. The iconic carmaker, whose own interest was once conflated with that of America's, has slipped behind luxury carmaker Tesla Inc in terms of valuation.

2017 Chrysler Pacifica First Drive

I know this is supposed to be a shameful secret, but I like minivans. I like the way the kids can enter and exit easily with the sliding doors. I like the comfortable ride they provide on road trips. I like the way I can reconfigure the interior seats to haul groceries, furniture, and kids. For decades, the minivan has been maimed by its uncoolness. Sales of the family movers have tapered to about 500,000 units per year while American families have shifted their allegiance to crossovers and SUVs. But America loves a redemption story, and I believe the minivan can be redeemed. Chrysler does too. At a time when the company is shedding vehicles from its lineup – so long, Chrysler 200 and Dodge Dart – its executives aren't paying any attention to whatever conventional wisdom suggests the minivan segment has foundered and reached its end. Instead, Chrysler just spent $2 billion to overhaul the architecture for its minivan. Enter the 2017 Pacifica, an all-new vehicle that immediately replaces the Town & Country and eventually will replace the Dodge Grand Caravan. It couldn't have come at a better time. Consumer Reports recently named the outgoing Town & Country one of its "Ten Worst Picks" among 2016 vehicles, an eyesore for the company that pioneered the minivan segment. Enticed by a slew of standard features and heavy incentives, I happen to own one of those disparaged Town & Country vans. Other than a transmission that always seems to be searching for the right gear, I've got no substantial complaints about the car. While it'd be a reach to say that any minivan is attractive, the new design makes the Pacifica the best of the bunch. But my ownership experience made me curious about how the new Pacifica would fare, whether Chrysler's billions were invested well and mostly, whether the Pacifica would truly feel like an all-new vehicle or whether it had merely been incrementally advanced. Navigating the roads in the rolling hills of Southern California last week, it didn't take long to find out. A revised 3.6-liter Pentastar V6 engine delivered 287 horsepower and 262 pound-feet of torque, making the climbs up California's hills effortless. Likewise, the new nine-speed automatic transmission never strained or felt clunky, like it has in other recent products like our long-term Jeep Cherokee. The harmonious combination of the upgraded engine and transmission felt like the single-biggest differentiator between the old and new minivans.