U.S. auto sales declined for the fourth successive month in June, coming in below most analysts’ estimates. Substantial discounts and easier loans failed to entice a greater number of consumers. This stretch of declines has to lead to speculation that sales in 2017 will be unable to match up to last year’s record showing.

But shares of automobile companies gained on Monday since consumer retail sales continued to sport stability. Additionally, General Motors Company (GM – Free Report) stated that the auto sector would end the year on a positive note. In this context, it is important to identify the factors dragging sales lower and the odds of a rebound in the months to come.

Consumers Prefer SUVs Over Cars

According to industry data provider Autodata, sales for June declined 3% to a seasonally adjusted level of 16.51 million units. Sales declined 2.1% during the first half of 2017 from the same period last year. The figure is significantly below the level of 17 million achieved in 2015 and 2016. Additionally, it is the lowest level experienced since Feb 2015 and represents a 2% year-over-year decline.

June’s data also revealed that U.S. retail consumers are preferring to purchase larger vehicles such as SUVs, crossovers and pickup trucks. In the process, passenger car sales have been affected. Meanwhile, the average length of a car loan hit a peak level of 69.3 months in June. This increases the financial risk for car buyers.

Falling Rental Sales Cause Overall Decline

Another reason for the decline in car sales was a significant change in industry leaders’ approach to their operations. During 2016, when sales hit a record level of 17.55 million, automakers had used easier loan terms and hefty discounts to lure customers. But with companies from the sector now focusing on lifting profit margins, low margin sales such as those related to car rental agencies are no longer a priority. In fact, the likes of GM have moved to cut back on such sales.