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US car boom ending as sales drop for fourth month

, May 2, 2017, 0 Comments

us-car-market-sales-marketexpress-inThe US car market appears to be cooling faster than expected as the big three American automakers as well as their foreign rivals reported fewer sales in April – the fourth consecutive month of declines.

After peaking last year with a record of 17.55 million cars sold throughout 2016 in the United States, the American car boom is coming to an end with a bang.

The big three American automakers on Tuesday all reported falling sales in April, compared to the same period last year. Industry analysts had expected the retreat – forecasting an industry-wide decline of between one and four percent – but the real figures surprised many.

General Motors (GM), the biggest US automaker, saw its sales drop 5.8 percent from April 2016, while Ford sales fell 7.2 percent. FCA US, the North American arm of Fiat Chrysler, even dropped seven percent.

Toyota saw a decline of 4.4 percent in the US market year-over-year, while Germany’s Volkswagen (VW) was still suffering from its diesel emissions scandal in the US, barely making up a massive loss a year ago with a small gain of 1.6 percent in April.

Huge incentives

It was the fourth straight month of decline for the industry, which Automotive News characterized as “the longest losing streak since the market bottomed out in 2009.”

Sales to consumers at car lots – rather than corporate, government and rental fleet sales – accounted for a big part of the downward slide at most companies. Even Americans’ love affair with sport utility vehicles and light trucks could not compensate for the decline.

Industry analyst Jessica Caldwell of Edmunds said the market was starting to see “the slowdown in 2017 we’ve been anticipating,” adding: “The industry has been holding its breath to see if the days of peak sales are over.”

In April, car sellers relied on incentives and discounting to lure customers into dealership lots, offering average incentives of $3,814 per new vehicle – up 13 percent, according to a joint analysis by JD Power and LMC Automotive.

Yet, the US car industry is still selling a lot of vehicles. GM touted double-digit spikes in sales of crossover vehicles, with Chevrolet and GMC models up 20 percent or more, and Buick and GMC models seeing increases in the 40 percent range.

FCA US was down across all of its brands, except Ram trucks which saw sales rise five percent. Ford’s bright spot was SUVs, with a 1.2 percent gain, while the company’s total car sales plunged 21.2 percent. Toyota SUV sales rose 12.9 percent.