US auto sales January 2018

US auto sales January 2018


Major automakers posted mixed U.S. new vehicle sales figures for January, as American consumers showed little sign of halting their shift away from passenger cars in favor of the larger, more comfortable, pickup trucks, SUVs and crossover models that manufacturers also love because they are far more profitable.

U.S. auto industry sales fell 2 percent in 2017 to 17.23 million vehicles after hitting a record high in 2016 and are expected to drop further in 2018 despite a solid economy. Interest rates are rising and more late-model used cars are returning to dealer lots to compete with new ones.

Automakers have leaned on consumer discounts to boost sales, a growing concern for observers who say this undermines resale values and profits. Discounts declined in January, but remained above 10 percent of manufacturers’ recommended prices.

“I think (consumer) incentives have reached the limit of their effectiveness in the marketplace,” Mike Jackson, Chief Executive Officer of AutoNation Inc told Reuters after the largest U.S. auto retail chain posted a higher quarterly net profit on Thursday.

“I think the industry has accepted that (sales) volumes will fall somewhat in 2018 … and I don’t think the industry is going to go over the cliff with insane incentives,” he said.

General Motors reported a 1.3-percent increase in January sales, driven by a 16-percent rise in fleet sales. Sales to consumers fell 2.4 percent. The automaker posted strong gains for models such as its Silverado pickup truck and Equinox crossover model, while its passenger cars continued to struggle.

Ford posted a 6.6-percent sales decline for January, with retail sales down 4.3 percent.

Sales of Ford’s F-Series pickup trucks — America’s best-selling vehicle brand for decades — rose 1.6 percent. Passenger cars were down more than 23 percent.

“This (passenger cars) continues to be a difficult segment as we see a continued shift into SUVs,” Ford’s U.S. sales chief Mark LaNeve said on a conference call on Thursday, adding “we anticipate continued migration from cars to SUVs over the next five years.
Ford has garnered negative headlines as it works to improve its results and rejig its product lineup.

On a conference call, Autotrader analyst Michelle Krebs wondered aloud if that had hurt the automaker.

“Ford cars continue to get clobbered in the marketplace,” she said.

Toyota‘s sales rose 16.8 percent in January. It noted strong demand for its pickup trucks and SUVs, plus its revamped Camry passenger car, which was up more than 21 percent. The automaker has bet on boosting its share of the shrinking passenger car market with the all-new sedan.

Fiat Chrysler Automobiles (FCA) said that its new vehicle sales fell 13 percent in January, driven by a 50 percent drop in fleet sales, in line with the automaker’s strategy to reduce these lower-margin sales to rental agencies, businesses and government bodies.

FCA’s retail sales to consumers rose 2 percent to their second-highest level since 2001. Sales of its Ram pickup trucks fell 16 percent in January. FCA recently unveiled a revamped pickup truck that will go into production at the end of this quarter.

Nissan said its sales rose 10 percent in January, with pickup trucks, SUVs and crossovers up 18 percent. The automaker’s luxury Infiniti brand, however, fell 8 percent, driven by a decline in fleet sales.

Judy Wheeler, head of U.S. sales for the Nissan brand, said the recent tax overhaul should be a positive for sales in 2018.

“I think customers will have more disposable income … and we’ll see them come in to get into a new vehicle,” she said.

GM shares were up 1 cent at $42.42, while Ford was down 6 cents at $10.90 and FCA was off 0.5 percent at $24.04.



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