Auto Makers Post Mixed US Sales in March – Wall Street Journal
Auto makers reported mixed sales in March, with new warning signs emerging that car companies are stretching to keep demand humming after record results last year.
Discount spending is on the rise and new evidence emerged in March that sales to fleet customers such as rental agencies in some key cases boosted new-car tallies. Car loans stretching 84 months or longer and the share of vehicles leased both increased, according to researcher J.D. Power and Associates.
Some auto makers early Friday pegged the month’s selling pace at a seasonally adjusted annual rate of 17.1 million light vehicles, below analyst expectations and the 17.5 million the industry reported in February. Detroit’s three auto makers reported sales gains, but their results fell short of expectations and their shares declined in midday trading.
Still, historically-low gas prices and interest rates continue to lure consumers to dealer showrooms. The U.S. added a healthy 215,000 jobs in March and the unemployment rate edged higher to a moderately low 5%. Federal Reserve Chairwoman Janet Yellen earlier in the week signaled a cautious approach to raising interest rates later this year.
Those favorable economic conditions set the stage for continued growth in car sales. In March, favorable weather and a pair of extra selling days in part helped some car makers post their best results for the month in a decade. A typically hotter spring selling season for car makers looms, and consumers continue flocking to higher-margin trucks and sport-utility vehicles.
“We’re looking forward to a great April,” said Doug Moreland, who owns dealerships in Colorado, Arizona and Nevada. “What they’re buying is trucks, trucks, trucks.” Mr. Moreland said his chain’s March sales fell slightly in part because of bad weather in the Denver area.
U.S. new vehicle sales totaled $55 billion in March, up nearly 10% and the highest for the month, data provider TrueCar Inc.
estimated. TrueCar estimated average transaction prices rose 2% in March to $32,887.
“Economic conditions…are still quite good. Interest rates are still better than they’ve ever been,” said Scott Keogh, president of luxury auto maker Audi AG’s U.S. operation, in an interview last week at the New York International Auto Show. Americans driving vehicles more than 10 years old and a boom in new car technology also bode well for sales the rest of the year, he said.
Fiat Chrysler Automobiles
NV posted an 8.1% rise to 213,187 vehicles sold during the month, for the Italian-U. S. auto maker’s highest sales for March in a decade. Jeep sales soared 15% for the brand’s 30th consecutive month of year-over-year gains. Minivan demand also hit a record, with sales of the Dodge Grand Caravan and Chrysler Town & Country more than doubling.
Ford Motor Co. reported sales rose 7.8% over a year earlier to 253,064 vehicles. F-series pickup truck sales rose 9% to their best March while Ford-brand SUVs logged their best sales for the month since 2001.
Toyota Motor Corp.’s sales fell 2.7% amid weaker demand for its sedans and coupes. Volkswagen AG
sales fell more than 10% as the German auto giant continues grappling with fallout from a diesel emissions-cheating crisis.
Honda Motor Co.
’s sales jumped 9.4% over a year earlier on the back of record results for Civic cars and strong demand for popular crossovers, SUVs and minivans. Nissan Motor Co.
, meanwhile, recorded a 13% jump in sales. The Japanese auto maker’s crossovers, trucks and SUVs rose 9% to their best month ever.
RBC Capital Markets analyst Joseph Spak predicted that the industry inventories of unsold vehicles decreased from February, and that investors will be looking for any signs that auto makers are scaling back their production plans.
Wall Street will be expecting auto sales to continue their blistering pace, with continued strength in SUVs, light trucks and crossovers. Trucks and SUVs made up 57% of sales in February, according to researcher Autodata Corp., up from 54% a year earlier.
J.D. Power and LMC Automotive, however, forecast retail sales of light vehicles will be down slightly in March. But LMC Senior Vice President of Forecasting Jeff Schuster said, “the outlook for the year remains robust” and that despite the softness in March, year-to-date sales volume remain roughly 5% ahead of a year ago through the first three months.
—Gautham Nagesh contributed to this article.
Corrections & Amplifications:
Jeff Schuster is senior vice president of forecasting at LMC Automotive. An earlier version of this article misspelled his surname. (April 1, 2016)
Write to Anne Steele at Anne.Steele@wsj.com