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US car sales mixed in January; trucks stay strong
[NEW YORK] Automakers reported mixed US car sales in January, with strong demand for SUVs and pickup trucks continuing to provide a cushion in a declining overall auto market.
Ford, Fiat Chrysler and Honda all reported declines in year-over-year sales, while General Motors scored a modest increase and Toyota saw a more substantial jump.
Overall new car sales came in at 1.15 million, up one percent compared with January 2017, according to Autodata. Some analysts had predicted a modest decline.
The January figures mean the market is on track for annual sales of 17.12 million, according to Autodata.
"January numbers suggest 2018 will be another healthy year for new vehicles sales," said Karl Brauer, executive publisher of Autotrader. "It also suggests the growing schism between car and truck sales will continue, with almost every crossover, SUV and truck up last month and almost every car down in volume."
US car sales fell last year for the first time since the financial crisis and are projected to decline again in 2018. Still, analysts and industry executives expect US sales this year to remain solid amid low unemployment and strong consumer confidence.
"US economic factors are very healthy and we're seeing the effect in the auto industry - not just in strong demand for SUVs and pickups, but in demand for high trim versions of vehicles," said Mark LaNeve, Ford's vice president for US marketing.
Ford's January sales dropped 6.6 per cent from the same month of 2017 to 161,143. Within the total, car sales slumped 23.3 per cent, including big drops for the Fusion and Focus, but that was partially countered by increased sales of the market-leading F-Series pickups.
Fiat Chrysler (FCA) saw sales fall 13 per cent to 132,803, with gains for the Jeep brand offset by hefty declines in other models.
And in contrast with the trend for strong sales of pickup trucks, the Ram truck brand fell 16 per cent. However, FCA introduced a revamped fleet of the popular pickup at the Detroit Auto Show last month.
Honda reported a 1.7 per cent decline, with cars down slightly and the company pointing to "inventory constraints" as a limitation on truck sales.
Meanwhile, GM posted a 1.3 per cent increase in overall sales compared to January 2017 to 198,548. The biggest US automaker pointed to strong sales of larger vehicles, including the Silverado pickup truck and Chevrolet Equinox SUV.
Toyota lead the pack with a 16.8 per cent jump last month to 167,056, on gains in light trucks and in its sedan business.
The Toyota Camry, which was revamped with the 2018 model, saw a 21.3 per cent increase in January. The company also will introduce an upgraded Avalon sedan to dealerships this spring.
Analysts view the US auto market as in a "post peak" period after a lengthy streak of rising sales, with the decline softened somewhat by US tax reform.
Key questions facing the industry include tough negotiations over revamping the North America Free Trade Agreement that could threaten automakers that currently export to the US from Mexican factors.
Another worry is a possible shift in US monetary policy that could make it more difficult for consumers to buy cars.
"The hot economy, now with Tax Reform added as well, could force the Federal Reserve to raise interest rates more aggressively than previously thought," said Charlie Chesbrough, senior economist for Cox Automotive.
"This would result in higher interest rates on auto loans and create additional headwinds for some consumers who are on the edge of being able to afford a new vehicle."