Strong economy, discounts lift car makers’ US March sales

DETROIT — Major automakers on Tuesday reported higher new vehicles sales for March on the back of a strong US economy and big consumer discounts, sending shares in Detroit’s automakers up.

Industry sales in March rose 2.5% to 1,653,529, according to Autodata, which said the seasonally adjusted annual rate for the month was a better-than-expected 17.5 million versus 16.8 million a year ago. Analysts polled by Reuters had expected a March SAAR of 16.9 million.

General Motors Co. posted a 16% jump in new vehicle sales from the previous March, led by a 14% increase in higher-margin retail sales to consumers. Fiat Chrysler Automobiles NV (FCA) reported a 14% increase and said it saw a 45% spike in sales of its popular Jeep models, giving the brand its best sales month on record.

Last year, US auto sales fell 2% after hitting a record high of 17.55 million units in 2016. Sales are expected to fall further in 2018 as interest rates rise and 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.

GM notched double-digit sales increases across all brands in March, particularly for its SUV and pickup truck models.

While GM said its average transaction price was up $900 in the first quarter, the company’s consumer discounts as a percentage of transaction prices hit 14.5% in March.

The no. 1 US automaker said earlier on Tuesday it will stop reporting monthly US vehicle sales, saying the 30-day snapshot does not accurately reflect the market and will instead issue quarterly sales.

Other automakers have not yet said whether they will follow suit.

Industry analysts consider discounts of over 10% to be unhealthy as they undermine resale values and erode profits.

FCA’s retail sales to consumers outstripped those of no. 2 US automaker Ford Motor Co. But FCA also saw a 22% increase in lower-margin fleet sales to rental car companies and government agencies. Over the past year FCA has pursued a policy of cutting fleet sales.

Ford reported a 3.4% increase in overall sales for March, led by an 8.7% rise in fleet sales. Retail sales were up just 0.80% in the month, but Ford said sales of its best-selling F-Series pickup trucks were the best since 2000.

Toyota Motor Corp. reported a 3.5% increase in sales in March, with double-digit increase in SUV and pickup truck sales offsetting a 6.1% decrease in sedan sales. Sales of the company’s completely revamped flagship Camry sedan fell 1.1%.

Honda Motor Co. Ltd. said its March sales rose 3.8%, thanks largely to SUV and pickup truck sales. The automaker’s new Accord sedan saw a 9.9% sales decrease.

US consumers have increasingly shunned passenger cars in favor of more comfortable, higher-margin SUVs and pickup trucks.

Nissan Motor Co. Ltd. bucked the trend for the month with a 3.6% decline in sales, led by an 8.9% drop in sedan sales. —