Tor­rid pace of U.S. auto sales cools in March

Sales rise less than 1% in the month, a sign of a long-ex­pected in­dus­try slow­down.

Los Angeles Times - - BUSINESS - As­so­ci­ated press

U.S. car buy­ers tapped the brakes in March, a sign of a long-ex­pected slow­down in the blis­ter­ing pace of sales.

March sales were up less than 1% com­pared with the same month a year ear­lier. U.S. con­sumers bought 1.5 mil­lion new cars and trucks in March, ac­cord­ing to Au­to­data Corp.

Some au­tomak­ers re­ported larger gains. Hyundai’s U.S. sales jumped 12% over last March af­ter a big boost in in­cen­tives. Subaru’s sales were up 10%. Toy­ota’s sales were up 5%, and FCA — the par­ent of Chrysler and Fiat — said its sales rose 2%.

But those gains were nearly off­set by lower sales at other ma­jor au­tomak­ers. Gen­eral Mo­tors’ sales fell 2% and Ford and Nis­san both saw 3% de­clines. Honda’s sales fell 5%, and Volk­swa­gen’s plum­meted 18%.

For the most part, March didn’t see the big in­creases to which the in­dus­try has grown ac­cus­tomed. U.S. auto sales were up 14% in Jan­uary, for ex­am­ple, and 5% in Fe­bru­ary.

There were sev­eral con­tribut­ing fac­tors. Last March saw a surge in sales af­ter an un­usu­ally cold Fe­bru­ary; by con­trast, this March still had lin­ger­ing snow in much of the coun­try. This March also had one less week­end than last March.

Still, March gave the in­dus­try a taste of what’s to come as U.S. new-car sales reach a nat­u­ral peak. Sales have been in­creas­ing by around 1 mil­lion ve­hi­cles each year since 2009, when sales fell to 10.4 mil­lion ve­hi­cles in the depths of the re­ces­sion. But as sales ap­proach the his­toric peak of 17 mil­lion, the pace is ex­pected to slow. U.S. con­sumers bought 16.5 mil­lion new ve­hi­cles last year.

Alec Gu­tier­rez, a se­nior mar­ket an­a­lyst for Kel­ley Blue Book, said he ex­pects sales to in­crease by around 2.5% this year, or 400,000 cars and trucks. Gu­tier­rez says March is usu­ally one of the strong­est months of the year, as buy­ers spend tax re­turns and Ja­panese au­tomak­ers of­fer good deals so they can close out their fis­cal years on a high note. Low in­ter­est rates and low gas prices are also en­tic­ing fac­tors. But sales were still flat for the month.

“This re­ally shows we’re at a point where sales are go­ing to grow at a much slower pace,” he said.

GM — like other au­tomak­ers — saw big de­clines in car sales as con­sumers flocked to SUVs and trucks. Sales of the com­pact Sonic dropped 51% for the month, and Cadil­lac ATS sales dropped 31%. But Chevrolet Sil­ver­ado pickup sales were up 7%. GM sold 249,875 cars and trucks last month.

Ford’s F-Se­ries pickup truck sales were down 5% as the com­pany con­tin­ues to change over to its new alu­minum-bod­ied F-150. Ford has said it wouldn’t have nor­mal truck in­ven­tory lev­els on deal­ers’ lots un­til this sum­mer. But the com­pany also posted big de­clines for some of its other top sell­ers, in­clud­ing the Es­cape SUV, which was down 8%, and the Fu­sion sedan, which fell 12%. Ford sold 235,929 cars and trucks last month.

Toy­ota said its car sales were flat but its truck and SUV sales jumped 12%. RAV4 small SUV sales were up 28%. Lexus SUV sales were also strong thanks to the new NX small SUV. Toy­ota sold 225,959 ve­hi­cles in March.

Honda’s car sales also fell and its SUV sales were flat. The CR-V, a peren­nial best­seller in the small SUV mar­ket, saw sales drop 4%. Honda sold 126,293 ve­hi­cles in March.

FCA sold 197,261 ve­hi­cles for its best March since 2007. Jeep sales jumped 23% thanks to brisk sales of the Chero­kee, Grand Chero­kee and Pa­triot SUVs. Chrysler brand sales were also up as sales of its 200 sedan more than dou­bled. But sales of the Ram pickup fell 2%.

Nis­san’s truck and SUV sales were up 15% thanks to strong sales of its new Rogue cross­over. But that wasn’t enough to off­set a 13% decline in car sales. Nis­san sold 145,085 ve­hi­cles last month.

Hyundai spent an es­ti­mated 25% more on in­cen­tives com­pared with last March, ac­cord­ing to the car buy­ing site TrueCar.com. That prob­a­bly boosted sales. Hyundai’s sales were up 12% to 75,019 for its best U.S. sales month ever. Sales of the re­designed Ge­n­e­sis sedan more than dou­bled.

Subaru also saw big gains, but with a more mod­est in­cen­tive in­crease of 6.5%. Subaru is ben­e­fit­ing from re­cently re­designed ve­hi­cles, in­clud­ing the Le­gacy sedan, which saw sales nearly dou­ble over last March. Subaru sales were up 10% to 49,111.

Volk­swa­gen strug­gled in March. Sales of its new Golf more than dou­bled, but the rest of its lineup saw sales de­clines. Volk­swa­gen sold 30,025 cars and SUVs last month.

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