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US car sales hit brakes in January
[CHICAGO] US car buyers hit the brake pedal in the new year, with the industry on Wednesday reporting a significant slowdown from December, but sales could be on track for another big year.
GM, Ford, Toyota and the North American arm of Fiat Chrysler, FCA US, all saw sales dwindle, though it is a traditionally slow month for car makers as winter sets in and consumers recover from holiday spending.
Other car makers, with smaller US inventories, posted impressive gains, including Nissan, Honda, Mazda and Volkswagen. Most were buoyed by strong demand for light trucks and sport utility vehicles (SUVs).
Total industry sales fell by almost a third compared to December, according to Autodata.
However, the annualised sales rate of 17.61 million vehicles, seasonally-adjusted, would mean a third year of record sales if the pace holds up through the end of 2017, even though that is about 1.6 per cent below the year-ago period.
The bigger auto makers took the brunt of the slowdown in the month.
GM's American sales fell 3.8 per cent compared to Jan 2016, Ford was down one per cent, while FCA US and Toyota each plunged about 11 per cent.
"After a record December capped a new record year of vehicles sales in 2016, January figures appear to be enduring a hangover effect," Kelley Blue Book analyst Alec Gutierrez said in a forecast statement last week.
Consumers who were still out shopping for cars in the sluggish sales month appeared to continue the trend of favouring light trucks, crossovers and SUVs, over sedans and compact cars.
The bigger vehicles often cost more, which helped profitability for GM, the biggest American auto maker, as consumers paid record average prices for its vehicles last month even "while key competitors sold down their large stocks of deeply discounted, old-model-year pickups," GM US sales chief Kurt McNeil said in a statement.
Ford said consumers were paying more on average for its vehicles as well, thanks to strong demand for its pricier F-Series pickups, which was up 13 per cent.
FCA US, struggling in many of its car models, including Chrysler, Fiat and Dodge brands, saw sales increase for Ram trucks and some Jeep SUV models.
Toyota also sold more SUVs, but fewer of its Camry, Corolla and Prius sedans. Its Lexus luxury brand took a 40.6 per cent tumble, which the company blamed partly on low SUV inventories.
Nissan reported a 6.2 per cent sales gain, thanks to its crossovers, trucks and SUVs, especially the Nissan Rogue crossover, which accounted for a quarter of all Nissan or Infiniti brand vehicles the company sold in January.
American Honda said its January sales increased nearly six per cent, with its popular CR-V SUV accounting for more than a quarter of all vehicles sold.
Volkswagen, which said Wednesday it would pay an additional US$1.2 billion to US customers in connection with its diesel emissions cheating scandal, posted an impressive 15 per cent sales jump.
Meanwhile, Tesla said it sold 35 per cent more of its electric vehicles, for a total of 2,800 units.
US car sales have enjoyed two consecutive years of record numbers, with 17.55 million vehicles sold last year, according to a tally by Autodata. And December saw a last-minute shopping frenzy, as auto makers offered discounts.
American consumers last year were most interested in light trucks and SUVs, which accounted for almost 60 per cent of sales. Many auto makers have signalled that they plan to double-down on investments in these bigger models.