Car Sales End Summer On Down Note

DETROIT -- (WWJ) An August dip in car sales has more observers saying the current sales cycle has peaked, but we may remain at the peak for some time now.

"Sales are plateuing some," says AutoTrader.com analyst Michelle Krebs. "But, again at a very high level."

Fiat Chrysler was the only major carmaker to post a sales increase, about three per cent. Smaller brands like Subaru and Land Rover also posted gains.

But single-digit drops were the trend. Ford sales fell 8 percent, Honda 4 percent, General Motors 5 percent--with other carmakers reporting similar drops.

But, with the industry still on a track to come in slightly above or slightly below last year's sales record of 17.5 million, there was little reason for concern.

"Certainly there's a lot of talk and speculation about peak auto, about a potential downturn," said General Motors spokesman Dan Flores. We think all the the economic factors point to continued, sustainable strong sales."

If car makers opened up their pocketbooks, and added new incentives, edmunds.com analyst Jessica Caldwell says they could beat the 2015 record. But, it may not be worth the cost.

"We're still at record pace, better than we've ever been," she said. "The industry itself is in a much healthier place that it has been in the past when we have had volumes these high."

That, Caldwell says, is creating strong profits, even as sales weaken slightly.

LMC Automotive analyst Jeff Schuster expects sales to remain in the 17 million range through 2017. But, he's quick to add that there are several factors that could cause the sales climate to change quickly.

"We're keeping an eye on interest rates, and the overall economy. Throw into the mix the election, and we should have an interesting end to the year for auto demand."

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