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Several US automakers reported lacklustre new vehicle sales for March as investors continue to worry that the domestic auto industry has hit a plateau, with Ford reporting sales down 7 per cent in March from a year ago on the back of sharply lower fleet sales, and General Motors reporting sales up 1 per cent year-on-year.
Ford sold 236,250 vehicles in March this year, down from 254,711 last March, largely due to a steep decline in fleet sales which were down 17 per cent reflecting a strong year-ago comparison, the company said in a statement. But profitable truck sales rose 10 per cent for the month, year on year.
General Motors fell short of market expectations, with sales rising 1 per cent year on year in March, to 256,224 up from 252,128 for the year earlier period.
Fiat Chrysler said its US sales had fallen 5 per cent in March to 190,254 units from 199.467 last March.
Nissan and Honda reported weak sales for passenger cars in March. Nissan reported sales up 3 per cent, at 158.832, boosted by strong sales of the Nissan Rogue small sport utility vehicle. Honda sales slipped nearly 1 per cent on weak sedan sales.
“March, one of the three biggest sales months of the year, is coming in a bit softer than we expected. 2016 surprised us by eking out a new record,” said Michelle Krebs, analyst at Autotrader.com. “But March demonstrates that the industry has indeed plateaued, albeit at a high level”.
However, Kurt McNeil, US vice president of sales operations at GM noted that the economy is strong and said he expects more growth ahead for our brands. He said: “More people are working, consumer confidence is at a 16-year high, fuel prices are low and Chevrolet, Buick, GMC and Cadillac have a wave of new crossovers to compete in the industry’s biggest and hottest segments.”
Industry-wide, US new vehicle sales are expected to rise in March for the uptick of a so-far lacklustre 2017. But inventory levels remain near historic highs and automakers continue to cut into profits with large discounts aimed at boosting sales. A glut of used cars coming off lease is putting pressure on new car prices.
Edmunds, the auto consultancy, forecasts auto sales for the first quarter to be flat on the first quarter of 2016, with March sales up 2 per cent from the year earlier period.
“If you only look at the sales numbers, it could be tempting to say that the industry is just as strong as it was a year ago,” said Jessica Caldwell, Edmunds executive director of industry analysis. “But there are several areas of concern this year lurking just below the surface. Inventories have reached levels not seen in more than a decade, and incentives are rising. We’re also seeing an increase in loan duration and indications of an increase in subprime lending, both of which demonstrate sales aren’t coming as easily as they used to”.