A quarter of the way through 2016, the automotive industry remains on track for a potential second-consecutive record-setting sales year.

Each of Detroit’s three automakers posted March sales gains as the industry benefited from two extra selling days and a continued strong customer appetite for trucks and SUVs. Ford Motor Co. and Fiat Chrysler Automobiles each posted an eight percent sales gain for their best results in a decade. Crosstown rival General Motors Co. said its sales rose 0.9 percent.

Despite the strong numbers, some red flags have started to emerge: J.D. Power this week warned that automakers are juicing numbers by discounting vehicles at a higher rate; some automakers like Ford and Hyundai are increasing their lower-profit fleet sales; and leasing numbers remain high, which could impact on how long the industry can sustain its torrid selling pace.

But some analysts don’t think there’s cause for concern.

“I think we’re still in a very good place from an industry health perspective,” said Alec Gutierrez, senior analyst for Kelley Blue Book. “From an overall fleet share perspective, the numbers aren’t really drastically higher than we saw last year, and I don’t think we’re at point that we’re all that concerned with the incentive spending.”

KBB estimates that automakers are offering roughly $3,000 in incentives on each vehicle, up only slightly from a year ago.

It also estimates that fleet sales are at healthy levels for the industry as a whole, but Ford and GM are likely at opposite ends of the fleet sales spectrum.

Ford said 37 percent of its 254,711 sales last month were to rental companies, government agencies and commercial businesses. That’s up drastically from 29 percent at this time last year, although Ford executives have said this year’s numbers are front-loaded and should “smooth out” by the end of the year.

GM, meanwhile, saw a 3.6 percent reduction in its fleet sales to 23.3 percent. The intentional sell-down of its less-profitable fleet business led to lower overall sales, and bigger drops for unpopular cars that typically do well on rental lots for companies like Hertz and Avis. Case-in-point: the Chevy Cruze, a popular rental car, saw a 59 percent sales drop last month.

GM’s 252,128 sales included a 6.9 percent jump for its retail sales. Its 0.9 percent overall sales increase can be attributed to an intentional decline in fleet sales.

“The strong retail and Commercial sales GM has been delivering are the result of a multi-year strategy to strengthen our brands, attract new customers and grow profitably,” said Kurt McNeil, U.S. vice president of Sales Operations. “We are growing retail sales faster than the industry, and we are doing it with disciplined incentives and inventories, and lower rental deliveries. Our business is very healthy, and we are going to manage it with conviction to keep it that way.”

GMC sales jumped 6.9 percent and Chevy sales increased 1.4 percent. Cadillac sales fell 5.1 percent and Buick sales tumbled 11.3 percent.

Ford, meanwhile, was led by its SUV sales, which were up 15.8 percent for the first three months of the year; the segment’s best start ever.

“Customers continue buying high-end SUVs and trucks, helping the Ford brand increase its average transaction prices by more than $1,600 per vehicle in March — nearly double the industry average,” said Mark LaNeve, Ford vice president, U.S. Marketing, Sales and Service. “We have been seeing solid sales momentum in the first quarter across our entire portfolio, with car, SUV and truck sales up across the board.”

Ford sold 73,884 F-Series trucks last month, the first time its broken the 70,000 mark this early in the year since 2007.

Lincoln’s sales were up 11.4 percent, driven mostly by its MKX, which saw an 87.9 percent sales bump.

FCA’s March numbers were its best since 2006. It sold 213,187 vehicles last month, up from 197,261 the year before.

As has been the case in recent months, Fiat Chrysler’s sales were driven by its Jeep and Ram brands. Jeep sales rose 15 percent for its best March ever, while Ram sales rose 11 percent. Dodge sales were also up 11 percent, while Fiat sales tumbled 24 percent and Chrysler brand sales fell 13 percent.

“Strong Jeep and Ram brand sales gave us a fast start to the important spring selling season and extended our year-over-year monthly sales gains to six full years,” said Reid Bigland, Senior Vice President- Sales, FCA – North America. “As consumers continue to shift their buying preference towards utility vehicles and trucks, they are walking directly into the FCA wheelhouse.”

Eight FCA vehicles set monthly sales records, including the Jeep Compass, Dodge Journey, Ram pickup, Ram ProMaster , ProMaster City, Jeep Wrangler, Cherokee and Renegade.

Among other automakers: Volkswagen sales fell 10 percent as it continues to struggle with fallout from the emissions cheating scandal. Nissan sales rose 13 percent; Toyota sales fell 2.7 percent; and Honda sales rose 9.4 percent.

Kelley Blue Book expects March sales will increase 8 percent year-over-year to a total of 1.66 million new cars and trucks. Edmunds.com expects a 7.3 percent bump to 1.65 million new vehicles sold.

“March auto sales show another month of positive year-over-year growth, rounding out a consistently strong first quarter for the industry,” Jessica Caldwell, Director of Industry Analysis for Edmunds.com, said in a statement. “The sales we saw in these three months sets us up for another potentially record-breaking year, especially as we began to approach the popular summer selling season.”


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