US auto sales tumble in what could be first annual drop since 2009

Of major automakers, only Hyundai and Volkswagen reported increases.

DETROIT — The six top-selling automakers in the US reported sales declines last month as demand seems to be slowing after seven straight years of growth.

General Motors, Ford, Toyota, Fiat Chrysler, Nissan and Honda all reported weaker US sales than a year ago.

Industry analysts expected April sales to be down anywhere from 2% to 4%, but still run at a healthy annual rate of around 17.1 million vehicles.

Kelley Blue Book says it looks like 2017 US sales will fall short of last year’s record 17.5 million for the first annual sales drop since 2009. It expects full-year sales of 16.8 million to 17.3 million.

Ford, which reported a 7.2% decline due largely to car demand that tumbled 21%, said that it’s still getting healthy prices for its vehicles as people load on more options. Vice-President of Sales and Marketing Mark LaNeve told analysts and reporters that April’s decline is nothing to panic about.

“We have to let the year play out,” he said. “In a plateauing industry you’re going to have some months that are up and some that are down,” he said. Economic fundamentals still point to strong sales, LaNeve said, including rising consumer confidence, low gas prices, an aging fleet of cars and trucks on the road and relatively low interest rates.

Even full-size pickup trucks, which had been selling briskly for much of the year, posted a sales decline. Ford, GM and Toyota pickup sales dropped, while Fiat Chrysler’s Ram sales were up 8%.

At Nissan, overall sales fell 1.5% as SUV demand couldn’t overcome slowing car sales. Sales of the Rogue small SUV rose almost 40%, but car sales fell nearly 14%.

At General Motors, sales dropped 5.8% as strong performances from some SUVs and the Cruze compact car couldn’t offset falling pickup truck demand.

Toyota reported a 2% sales decline for the month as healthy sales of the RAV4 small SUV were overcome by falling demand for cars such as the Camry and Corolla. Fiat Chrysler sales fell 7% for the month as it continued to exit the small and midsize car business. Sales of the normally strong Jeep brand fell, by 17%.

Honda sales fell 7% as Accord midsize car sales fell 15% and couldn’t be balanced out by a 13% jump in sales of the CR-V small SUV.

Of major automakers, only Hyundai and Volkswagen reported increases, just over 1% for Hyundai and a 1.6% gain for VW. Hyundai was boosted by record sales of the Tucson small SUV, while VW gained over sales that were depressed a year ago by its diesel emissions-cheating scandal.

While sales still are healthy, automakers are offering deals to compete for a piece of the shrinking pie. But there are signs that the industry is relying too heavily on incentives.

The average price paid per vehicle is starting to wane after years of steady increases, even for popular SUVs. Previously SUV prices kept growing while car prices fell due to sagging demand.

The average price paid for an SUV in April was $33,165, according to the consulting firm J.D. Power and Associates. That was down 2% from last April. One reason for the decline was that more customers were buying smaller, less expensive SUVs this year. But another was a whopping 18 per cent increase in incentives, which hit $3,338 per vehicle.

Jeff Schuster, a senior vice-president at the forecasting firm LMC Automotive, said automakers are fiercely competing so they don’t lose sales in the hot SUV market.

Last month, incentive spending was up 11% on cars, to $3,903 per vehicle. The average price paid for a car was $25,516, which was about the same as last year.

Pickup trucks were the only segment in which automakers offered fewer deals. Incentive spending was down 6% to $3,276 per vehicle. Customers were willing to pay $31,438 for a pickup in April, which was 1% more than a year ago.

News from © Canadian Press Enterprises Inc. 2016

Have your say:

Your email address will not be published. Required fields are marked *