Many major auto brands see lower US sales in March

 

Many auto makers had a difficult month in March, posting considerable declines in US sales, defying expectations for an increase compared to the same month of last year.

In the final month of the first quarter, many brands on Monday reported sales dropped compared to March 2016, when the industry was seeing record gains.

Forecasters had predicted robust sales last month, and it remained unclear whether the industry would live up to those expectations once sales reports were tallied from all auto makers.

But the news was not good from some of the biggest players.

Ford reported sales fell a worse-than-expected 7.2 percent, while Toyota sales dropped 2.1 percent, compared to the same month of last year.

FCA US, the American arm of Fiat Chrysler, continued to struggle, reporting a five percent decline in March. In the first three months of the year, FCA's sales were down eight percent.

Record (LSE: REC.L - news) truck and SUV sales could not help American Honda notch an overall increase last month, as total sales were down 0.7 percent, when accounting for declines at its Acura luxury brand.

In contrast, Nissan and GM (NYSE: GM - news) saw gains of 3.2 percent and 1.6 percent, respectively, helped by Americans' strong demand for light trucks and sport utility vehicles, and bigger discounts.

The disappointing numbers from many auto makers were in contrast to forecasts of an industry-wide sales increase of two percent year-over-year, according to auto data firm Edmunds.

But Edmunds analyst Jessica Caldwell sounded a cautionary tone, saying there were several areas of concern for the industry.

"Inventories have reached levels not seen in more than a decade, and incentives are rising," Caldwell said, referring to discounts and other incentives offered to consumers.

"We're also seeing an increase in loan terms and indications of a rise in subprime lending, which demonstrate sales aren't coming as easily as they used to," she said.

But while Toyota echoed that cautionary tone, saying the industry's overall selling rate may be declining, GM remained optimistic.

"More people are working, consumer confidence is at a 16-year high, fuel prices are low," Kurt McNeil, head of GM's US sales, said in a statement.

GM's total sales were up 0.9 percent in the first quarter, helped by a 10.4 percent jump in GMC truck demand.

"We see more growth ahead for our brands," McNeil said.

Stock movements after the monthly sales reshuffled the hierarchy among US companies, with Tesla Motors (Frankfurt: TL0.F - news) overtaking Ford for the number two spot and closing the gap with GM, the biggest US automaker by market capitalization.

Near 1530 GMT, Tesla shares were up 5.3 percent to $292.25 for a market capitalization of $47.7 billion after reporting a 69 percent jump in sales in the quarter ended in March.

Ford, which saw shares fall 3.0 percent, has a market capitalization of $44.9 billion. GM fell 4.0 percent and has a market capitalization of $50.9 billion.

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