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News18 » Auto
3-min read

US Car Sales Down in April, Compounding Several Months of Declines

Industry-wide, automakers sold 8.3 percent fewer cars last month compared to March, and 4.7 percent fewer than in April 2016.

AFP Relaxnews

Updated:May 3, 2017, 11:53 AM IST
US Car Sales Down in April, Compounding Several Months of Declines
Photo used for representative purpose only. (Image: AFP Relaxnews)

Car sales in the US slowed significantly in April, compounding several months of declines and suggesting the industry's record sales streak may be behind it.

The big three American automakers on Tuesday all reported that sales fell in April compared to the same period last year.

Industry-wide, automakers sold 8.3 percent fewer cars last month compared to March, and 4.7 percent fewer than in April 2016, according to Autodata.

Many analysts had expected the retreat, forecasting an industry-wide decline, but the drop was steeper than forecast.

It was the fourth straight month of falling sales for the industry, which Automotive News characterized as "the longest losing streak since the market bottomed out in 2009."

The seasonally-adjusted annual rate (SAAR) of sales fell to 16.88 million units, from 17.4 million last April when car sales were headed for another record year, according to Autodata.

- 'Starting to see the slowdown' -

GM, the biggest US automaker, saw its sales drop 5.8 percent from April 2016, while Ford sales fell 7.2 percent, and FCA US, the North American arm of Fiat Chrysler, dropped seven percent.

Toyota, one of the world's biggest carmakers, saw a decline of 4.4 percent in the US market year-over-year, while Nissan was down 1.5 percent.

Together these automakers accounted for about two-thirds of all cars sold in the United States, according to Barclays Research.

Sales to consumers at car lots -- rather than corporate, government and rental fleet sales -- accounted for a big part of the downward slide at most companies.

Even Americans love affair with sport utility vehicles and light trucks could not compensate for the decline. In the first three months of the year, SUV sales accounted for 40 percent of all vehicles sold in the US for the first time ever, said industry analyst Jessica Caldwell of Edmunds.

But slowing demand for all vehicles still pushed the industry downward.

"The industry has been holding its breath to see if the days of peak sales are over," Caldwell said. "We're starting to see the slowdown in 2017 we've been anticipating."

- Bigger incentives -

Car makers have relied on incentives and discounting to lure customers into dealership lots. Total incentive spending was up 13 percent so far this year to $3,814 per new vehicle, according to a joint analysis by JD Power and LMC Automotive.

As consumers gobbled up pricier SUVs, that may have accounted for average transaction prices remaining flat in April. For the industry overall, it stood at $34,814, according to Caldwell.

While likely off their peak, car makers are selling a lot of vehicles in the US market, and Barclays analyst Rob Martin maintained his expectation of a rebound in the current quarter.

"April sales are in line with our longer-term view on motor vehicle sales," Martin said.

Much of the enthusiasm remained in the light truck and SUV market. GM touted double-digit spikes in sales of crossover vehicles, with Chevrolet and GMC models up 20 percent or more, and Buick and GMC models seeing increases in the 40 percent range.

"Just five years ago, about one in four GM sales were crossovers. Today, they account for almost one-third of our deliveries and we see more growth ahead," Kurt McNeil, vice president of GM's US sales, said in a statement.

Ford's bright spot was SUVs, with a 1.2 percent gain, while the company's total car sales plunged 21.2 percent.

FCA US was down across all of its brands, except Ram trucks which saw sales rise five percent.

Toyota SUV sales rose 12.9 percent, while Nissan's light truck and SUV sales were up 11.2 percent.

Honda was down seven percent overall, with the CR-V sports utility one of a handful of models showing growth.

Volkswagen saw sales increases overall, as it continued its recovery from the emissions cheating scandal. In April, it was fined $2.8 billion after earlier pleading guilty to three felony charges of defrauding the United States and conspiring to violate the Clean Air Act.

The German global auto behemoth increased US sales by 1.6 percent in April. But the total, a mere 27,557 units, was less than the number of Honda CR-Vs alone sold in the same month.

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| Edited by: Krishna Sinha Chaudhury
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