By Adrienne Roberts 

This article is being republished as part of our daily reproduction of WSJ.com articles that also appeared in the U.S. print edition of The Wall Street Journal (October 3, 2018).

Several major auto makers reported steep declines in U.S. sales for September, a slowdown that comes amid shifts in North American trade policy and the looming threat of tariffs on European and Japanese auto imports.

The industry is expected to post a 7% drop in sales in September compared with the same year-ago period when full industry results are tallied later Tuesday. Analysts attribute the drop to one fewer selling day this month and a surge in sales last September as buyers rushed out to replace vehicles damaged from Hurricane Harvey and Irma.

Ford Motor Co.'s U.S. sales were down 11.3%, while Toyota Motor Corp. and Nissan Motor Co. also reported double-digit declines.

General Motors Co., which only reports sales on a quarterly basis, said its sales in the third quarter were down 11.1% over the prior year. For September alone, analysts estimate GM's sales were down about 15% over the prior-year period.

Fiat Chrysler Automobiles NV was one of the only major auto makers to report a gain last month, with U.S. sales up 15% compared with the same-year ago period, an increase driven by strong demand for its Jeep sport-utility brand. The increase helped Fiat Chrysler outsell Ford last month, the first time it has done so in more than a decade.

The weaker sales results come as the U.S. auto industry is already facing cost pressures on a number of fronts. New U.S. tariffs on imported steel and aluminum have caused prices on those materials to climb, denting bottom lines, and a new North American trade deal could increase costs for some car makers whose cars aren't compliant with the new duty-free rules.

The new pact -- officially called the U.S.-Mexico-Canada Agreement -- requires auto makers build a greater portion of their cars in North America and with higher-wage workers. The new content requirements could complicate operations for auto makers building small cars in low-wage Mexico and importing parts, such as engines and transmissions, from overseas.

"We might see the cost of producing a vehicle rise," said Charlie Chesbrough, a senior economist for Cox Automotive.

If the costs are passed on to the consumer, it could further dent demand for new cars at a time when the U.S. car market is already cooling after seven years of uninterrupted growth.

A proposed 25% tariff on imported vehicles and car parts is also threatening to send car prices higher and would hit the German and Japanese auto makers the hardest. The Trump administration is still investigating whether it can impose the tariff using a national-security law and must make a determination by February.

Higher interest rates and rising new-car prices are prompting more customers to move into the used-car market, where there's been a flood of lease returns coming back to dealerships in recent years. That's increasing the supply of low-mileage used cars that are only one or two years old and generally in good condition but can be purchased at a steep discount to a new car.

Still, auto executives are encouraged by the broader economic trends, which they say will continue to buoy sales through the remainder of the year.

"There's job growth, consumer confidence (is high), there seems to be a little more discretionary income available and tax reform has allowed people to have a little more flexibility," said Jack Hollis, general manager of Toyota North America.

Write to Adrienne Roberts at Adrienne.Roberts@wsj.com

(END) Dow Jones Newswires

October 03, 2018 02:47 ET (06:47 GMT)