New vehicle sales of Ford Motor Co. and Fiat Chrysler Automobiles NV grew in August amid a strong demand for SUVs.
At U.S. carmaker Ford, U.S. sales in August rose 4.1% over the same month a year earlier, with sales of Ford brand SUVs up 21%. The carmaker sold a total of 218,504 vehicles, compared with 209,897 vehicles in August 2017.
Ford said the F-series trucks line turned in its best performance since 2005 for the month of August with 81,839 units sold. The company's car sales dropped 21.3% year over year in August to 37,522 vehicles.
Fiat Chrysler's new vehicle sales in the U.S. rose 10% in August from the same month a year ago, led by its Jeep and Ram brands. Fiat Chrysler sold 193,718 vehicles during the month, up from 176,033 vehicles in August 2017. The company's Ram brand notched its best month of August sales ever with 54,808 units sold, compared with 43,322 in August 2017. Sales of the company's Jeep brand rose 20% year over year.
However, the company's Fiat and Chrysler brands registered year-over-year declines.
An S&P Global Market Intelligence analysis found that overall seasonally adjusted U.S. vehicle sales for August fell to 4.89 million units on an annualized basis, versus 5.87 million units a year ago.
About 3.72 million vehicles sold in the U.S. were assembled in the U.S., Canada and Mexico, while 1.17 million of the vehicles sold were produced outside the North American Free Trade Agreement region.
General Motors Co. the largest Detroit-based carmaker, no longer publicly reports monthly sales figures and has switched to reporting them on a quarterly basis. However anonymous sources told Bloomberg that the carmaker recorded a 13% year-over-year drop in U.S. sales for August as the company lowered its incentive spending during the month.
The company reportedly pulled back on incentives by more than $800 a vehicle on average.
Japanese automaker Honda Motor Co. Ltd.'s U.S. arm's total car sales in August grew 1.3% year over year, while Toyota Motor Corp. posted a 2% year-over-year decline in sales. The company sold 223,055 vehicles during the month.
At Nissan Motor Co. Ltd. sales rose 3.7% to 112,376 units in August from 108,326 units in the same period a year ago.
German automaker Volkswagen AG's American unit sold 32,255 vehicles in the U.S. in August, up 0.7% from August 2017. Its luxury car unit, Audi AG, sold 20,907 units, a 5.5% year-over-year rise.
Average interest rates on new car loans in August were 4.23%, up from 3.96% a year earlier. The average interest rate for used-vehicle loans increased to 4.4% in the month from 4.15% in 2017.
"The overall health of the consumer is very strong right now, which provides a solid base for our industry," said Mark LaNeve, Ford's vice president of U.S. marketing, sales and service, during a call with analysts.
However, analysts predict weaker auto sales in the second half of 2018. Jeremy Acevedo, manager of industry analysis at Edmunds, said August sales fall in line with the slower overall sales pace he expects to see through the second half of the year.
Acevedo said in an Aug. 29 research statement that there are a lot of things working against the automotive market right now, such as maxed out incentive spending, rising interest rates and vehicle prices reaching record highs.
"Add to that the uncertainty that comes with renegotiating Nafta and tariff talks and it amounts to what could be a challenging back half of the year for automakers," Acevedo said.
Charlie Chesbrough, senior economist at Cox Automotive noted in an Aug. 28 statement that the market remains strong and "all the talk of higher interest rates and trade tariffs is not chasing away buyers."
"However, we are still forecasting a slowing sales pace over the remaining months of the year as buying conditions slowly deteriorate due mostly to higher interest rates and continued high gasoline prices," Chesbrough said.