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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.

Honda exec says US market near capacity, could hurt subprime buyers

Is there a point in the US auto industry where companies should start considering the welfare of their customers ahead of selling more cars? American Honda Executive Vice President of Sales John Mendel thinks that level exists, and we may be getting very close to it.
According to Automotive News, Mendel believes that finding more customers in the market could require pursuing subprime buyers and offering longer-term loans. However, he refuses to use those tactics. While selling models this way can improve things briefly, the strategies hurt resale prices and lower vehicle profits over time. The company won't do "stupid things in the short-term that damage the person who bought yesterday," he said to Automotive News. "It's a very, very short-term tactic especially in the subprime area."
American Honda, which combines the Acura and Honda brands, has seen market share decline from 9.7 percent to 9.1 percent through July 2014, according to Automotive News, and Autoblog's By the Numbers stats showed it posted falling sales in five of the seven months with data this year. Though, Mendel claims that was partially because the company focused on retail sales over fleets. The delays of the launches for the Honda Fit and Acura TLX likely didn't help either.

Honda tags Civic, Accord, HR-V, Fit and more in fuel pump recall

American Honda Motor Company's recent issues with fuel pumps continue, as a new recall affects a large number of Honda and Acura vehicles from the 2018-2020 model years. The recall covers a total of 136,057 vehicles, including select 2018-2019 Acura NSX, 2019 Acura RDX, RLX, and RLX Sport Hybrid models, as well as 2018-2019 Honda Accords, Civic Hatchbacks, Civic Type Rs, HR-Vs, 2019-2020 Insights, and 2019 Fits.  National Highway Traffic Safety Administration campaign No. 20V314000, published May 28, 2020, states that the low-pressure fuel pump inside the fuel tanks of the aforementioned vehicles could falter or completely fail. Should the low-pressure fuel pump fail, the car could stall, regardless of its state of motion. Recall documents reveal fuel pump might fail due to swelling of the fuel pump motor impeller, which would cause the pump to seize. This issue is the result of a problem with how the parts were manufactured. These "lower density impellers" were "exposed to production solvent drying for longer periods of time." This caused some impellers to have surface cracking, which resulted in "excessive fuel absorption," which warps the impellers. Here's a breakdown of how many vehicles of each type were potentially affected:  2018-2019 Acura NSX: 146 2019 Acura RDX: 34,405 2019 RLX: 124 2019 RLX Sport Hybrid: 206 2018-2019 Honda Accord: 11,227 2018-2019 Civic Hatchback: 24,235 2018-2019 Civic Type R: 1,785 2018-2019 HR-V: 39,676 2019-2020 Insight: 14,959 2019 Fit: 9,294 Honda will notify owners to schedule an appointment with local dealerships. The fuel pump assembly on all affected vehicles will be replaced for free. For more information, visit NHTSA. Related Video: