Auto sales sputtering for 7th straight month

The auto industry's move away from rental fleet sales weighed heavily on overall July results

The auto industry's move away from rental fleet sales weighed heavily on overall July results

Ford's decline? 7.5 percent.

Carmakers have used lower-margin sales to rental fleets as a way to avoid shutdowns in plants. Fiat Chrysler has killed several models it once sold to fleets.

US sales of new cars and trucks were expected to show a decline in July as consumers pulled back on purchases and waited for Labor Day deals.

Declining sales could leave the Detroit Three with too many plants in North America, Jeff Schuster, a forecaster with LMC Automotive, said on Tuesday at an industry conference in Traverse City, Mich. It was the seventh straight month of lower sales. The exceptions have been Fiat Chrysler, which is poised to benefit from the shift in consumer tastes away from cars toward pickups and sport utility vehicles, and Tesla Inc., which has soared in anticipation of the more affordable Model 3 sedan. Chevrolet was down 15.3 percent, Cadillac fell 21 percent, Buick fell 30.5 percent and GMC, which concentrates on trucks, fell 7.3 percent.

With vehicle inventories bloated, profit-eroding discounts might need to rise further in the second half of the year to keep the sector chugging along even at a reduced speed. The carmaker had a supply of 104 days as of July 31, which was down from its end of June mark of 105 days.

Canada's economy grew by 0.6 percent in May from a month earlier, Statistics Canada said last month, exceeding economists' forecasts for 0.2 percent. Average interest rates on new-vehicle loans fell to a six-month low of 4.77 percent in July as more brands offered no-interest financing, Edmunds said. Fiat Chrysler had a 10 percent drop.

Sales of mid-size cars are expected to fall 14.5 percent in July, compared to a year ago, and compact sedans to fall 10.6 percent, USA Today reported, citing Kelley Blue Book.

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