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The big three US automakers reported a slow start to the new year after an unexpectedly strong December, with January new vehicle sales down 3.8 per cent for General Motors, 1 per cent for Ford and 11 per cent for Fiat Chrysler from January 2016.
Most US automakers had record-high sales in December because of heavy holiday promotions which may have pulled sales into 2016 that would otherwise have been made in January 2017, auto industry analysts said, reports Patti Waldmeir in Chicago.
The record December helped US car sales squeak by to a new record high in 2016, at 17.55m vehicles up from 17.5m in 2015.
GM said its US dealers delivered 195,909 cars, trucks and crossovers in January, down 3.8 percent year over year. “In early January, we focused on profitability while key competitors sold down their large stocks of deeply discounted, old-model- year pickups,” said Kurt McNeil, US vice president of Sales Operations for GM. GM said it estimates that for the total US industry, the seasonally adjusted annual selling rate (SAAR) for light vehicles was approximately 17.6m.
Ford January sales at 172,612 were down one per cent from the year earlier period.
Fiat Chrysler reported January US sales of 152,218 units, down 11 per cent from the year earlier period.
Sales at the end of last year appear to have been benefited by renewed consumer confidence, partly as a result of a “Trump bump” following the US election and partly due to large incentive spending, auto industry analysts said.
“Incentive spending is a concern as it continues to rise across the industry, and another (sales) record in 2017 would likely require undisciplined sales tactics driven by incentives, leasing and longer loan terms,” Kelley Blue Book said in a statement. It forecasts sales of between 16.8m to 17.3m this year, a one to four per cent fall from 2016.
But Jessica Caldwell, analyst at Edmunds, says she does not think last year’s “Trump bump” has ended yet.
“It’s tricky to use January as a bellwether for how auto sales will trend for the year. It’s the lowest volume month and only accounts for six percent of annual sales on average. But 2017 is already proving to be a year unlike any other – expectations were that sales were going to level off or decline, but the president has proven a bit of an X-factor. Considering the way the stock market has performed and current consumer sentiment, it seems policy will play a bigger role in the market than ever before.”
GM said it is “optimistic about the year ahead because the economy is strong”.
Nissan reported sales up 6 per cent for January year on year, on strong sales of sport utility vehicles, trucks and crossovers.