Sales for major U.S. auto makers sharply declined in July amid a modest slump in lease deals that have kept payments low, continuing an industry slowdown that has led to a glut of inventory on dealer lots and a spate of discounts.
General Motors Co. reported a 15.4% sales decline in July compared to the same period a year ago, selling 226,107 cars and trucks. Ford Motor Co.'s said sales slid 7.4% last month to 199,318 vehicles.
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Fiat Chrysler Automobiles N.V.'s posted a 10% decline in July, selling 161,477 vehicles, as its top-selling Jeep brand continued to struggle against rivals with newer sport-utility models.
While truck and sport utility demand remains strong, sales of sedans and other passenger cars have struggled amid low gas prices.
Full industry results are due later Tuesday for July, which is typically a strong selling month for auto makers. J.D. Power anticipates sales fell 5.4% in July, compared to the same month in 2016. The firm notes that manufacturers typically pull back on sales incentives after the July 4th holiday, "but this year elevated inventory levels coupled with the sales slowdown, have compelled them to maintain aggressive discounts throughout July."
The U.S. auto market, which topped a record 17.5 million in 2016, has grown seven consecutive years. Analysts expect that growth streak to end in 2017 as dealership traffic slows and fleet buyers, including rental-car firms, need fewer vehicles.
Car makers also facing a new problem: lenders are backing away from offering the cut-rate lease deals that kept monthly payments low and sheet metal flying off dealer lots in recent years.
Leasing accounted for 31.1% of all retail sales in the first half of 2017, falling slightly from last year's record of 32%, according to Edmunds.com. Buyers had been increasingly reliant on leases -- which keep payments low even as car prices rise -- until this year.
"For a long time, we were all wondering where the ceiling was for leasing. Now, it has been hit," said Jessica Caldwell, an analyst for Edmunds.com.
Swelling used-vehicle supply is accelerating the pullback on leasing, The increased supply comes after used-car values had grown steadily in the years following the 2009 financial crisis.
Write to Christina Rogers at email@example.com and Mike Colias at Mike.Colias@wsj.com
(END) Dow Jones Newswires
August 01, 2017 10:01 ET (14:01 GMT)