U.S. auto sales fall in July as carmakers slash rental fleet sales

DETROIT (Reuters) – U.S. carmakers said on Tuesday they continued to slash low-margin sales to daily rental fleets in July as General Motors Co (GM.N), Ford Motor Co (F.N) and Fiat Chrysler Automobiles (FCHA.MI) (FCAU.N) struggled to curb a slide in retail sales during the month.

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 Motor Corp (7203.T) reported a year-to-year gain, with sales up 4 percent to 222,057 – just 4,000 units behind GM. Honda Motor Co (7267.T) sales were down 1 percent to 150,980, and Nissan Motor Co (7201.T) 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.