Cold snap for U.S. April auto sales instead of spring thaw
Reuters
Published May 01, 2018 04:02PM ET
Cold snap for U.S. April auto sales instead of spring thaw
By Nick Carey
DETROIT (Reuters) - Most major automakers on Tuesday posted lower new U.S. vehicle sales for April as consumer demand continued to weaken and competition intensified following a lengthy boom for the industry.
According to Autodata, the seasonally adjusted annual rate of sales for April hit 17.15 million units compared with 17.04 million a year ago. That was in line with an April SAAR of 17.1 million units expected by analysts polled by Reuters.
Auto sales have been on a bit of a roller coaster ride this year, with a weak performance in February followed by a jump in sales for some automakers in March.
Ford Motor Co (N:F) reported a 4.7-percent decline in sales compared to April 2017, with retail sales to consumers down 2.6 percent. The No. 2 U.S. automaker said sales of its best-selling F-Series pickup trucks were up 3.5 percent, but SUV and passenger car sales were down 4.6 percent and 15 percent respectively.
For years, U.S. consumers have been shifting away from traditional passenger cars in favor of larger and more comfortable pickup trucks, SUVs and crossovers.
Ford last week outlined a plan to cut costs and boost profit margins that includes dropping traditional sedan models in North America.
But the number of new models vying for a share of the SUV market is growing faster than demand, threatening the fat profits automakers have enjoyed.
"That is a very competitive part of the market ... with so many new entries," Ford's U.S. sales chief Mark LaNeve said of the SUV segment on a conference call with analysts and reporters.
Last year, U.S. auto sales fell 2 percent after hitting a record high of 17.55 million units in 2016. Sales are expected to fall further in 2018 as higher interest rates push up monthly car payments. Also, millions of nearly new vehicles will return to the market this year after coming off lease, providing a lower-cost alternative for consumers.
"With a plateauing market, you are going to get some bumpiness," Ford's LaNeve said.
Nissan Motor Co Ltd's (T:7201) sales hit quite a bump, plunging 28 percent in April. The Japanese automaker's passenger car sales dropped nearly 35 percent and SUV and truck sales were down 23.1 percent. Even sales of the company's popular SUV crossover model Rogue were down almost 15 percent.
"April was an extremely challenging month with intense competition in the U.S. market," Nissan said in a statement. The company said declining retail sales and a "pullback on fleet volume contributed to lower performance."
No. 1 U.S. automaker General Motors Co (N:GM) announced last month that it would no longer report monthly sales and instead will just post sales on a quarterly basis. Industry estimates showed GM posting sales anywhere from flat to down 8 percent for April.
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Ford said on Tuesday it will continue to post monthly sales.
Fiat Chrysler Automobiles NV (FCA) (MI:FCHA) was alone among the top sellers in the U.S. market, posting an overall sales increase of 5 percent in April. But retail sales to consumers were down 1 percent while lower-margin fleet sales to rental car companies and government agencies were up 5 percent.
FCA's popular Jeep brand hit a record for April. But sales of FCA's Ram pickup truck were down 9 percent, though retail sales of the lucrative truck were up 3 percent.
FCA said last week when it reported first-quarter results that it had encountered problems ramping up production of the new RAM 1500 pickup truck at its U.S. Sterling Heights plant.
Toyota Motor Corp (T:7203) posted a 4.7 percent decline in sales for April, with a 1.5 percent increase in SUV and pickup truck sales offset by a 12.7 percent drop in passenger car sales.
Sales of Toyota's recently revamped flagship Camry sedan were down 5 percent.
Honda Motor Co Ltd (T:7267) said its April sales declined 9.2 percent, with a car sales off 14.4 percent and pickup trucks and SUVs down 3.9 percent.
Honda's all-new version of its flagship Accord sedan plunged 19.3 percent.
Hyundai Motor Co (KS:005380) said its sales were down 11 percent versus April 2017.
In afternoon trading, Ford and FCA shares were flat, while GM was down 54 cents or 1.5 percent at $36.20.
Written By: Reuters
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