Auto sales tumble; 7-year win streak could come to an end

DETROIT — The six top-selling automakers in the U.S. reported sales declines last month as demand seems to be slowing after seven straight years of growth.

General Motors, Ford, Toyota, Fiat Chrysler, Nissan and Honda on Tuesday all reported weaker U.S. sales than a year ago.

Industry analysts expected April sales to be down anywhere from 2 per cent to 4 per cent, but still run at a healthy annual rate of around 17.1 million vehicles.

Kelley Blue Book says it looks like 2017 U.S. sales will fall short of last year’s record 17.5 million for the first annual sales drop since 2009. It expects full-year sales of 16.8 million to 17.3 million.

Ford, which reported a 7.2 per cent decline due largely to car demand that tumbled 21 per cent, said that it’s still getting healthy prices for its vehicles as people load on more options. Vice-President of Sales and Marketing Mark LaNeve told analysts and reporters that April’s decline is nothing to panic about.

“We have to let the year play out,” he said. “In a plateauing industry you’re going to have some months that are up and some that are down,” he said. Economic fundamentals still point to strong sales, LaNeve said, including rising consumer confidence, low gas prices, an aging fleet of cars and trucks on the road and relatively low interest rates.

Even full-size pickup trucks, which had been selling briskly for much of the year, posted a sales decline. Ford, GM and Toyota pickup sales dropped, while Fiat Chrysler’s Ram sales were up 8 per cent.

At Nissan, overall sales fell 1.5 per cent as SUV demand couldn’t overcome slowing car sales. Sales of the Rogue small SUV rose almost 40 per cent, but car sales fell nearly 14 per cent.

At General Motors, sales dropped 5.8 per cent as strong performances from some SUVs and the Cruze compact car couldn’t offset falling pickup truck demand.

Toyota reported a 2 per cent sales decline for the month as healthy sales of the RAV4 small SUV were overcome by falling demand for cars such as the Camry and Corolla. Fiat Chrysler sales fell 7 per cent for the month as it continued to exit the small and midsize car business. Sales of the normally strong Jeep brand fell, by 17 per cent.

Honda sales fell 7 per cent as Accord midsize car sales fell 15 per cent and couldn’t be balanced out by a 13 per cent jump in sales of the CR-V small SUV.

Of major automakers, only Volkswagen reported an increase, of 1.6 per cent over sales that were depressed a year ago by the company’s diesel emissions-cheating scandal.

As automakers released sales data Tuesday, stocks of Detroit automakers came under heavy pressure.

Ford shares hit a new 52-week low of $10.90 Tuesday morning before recovering a bit to $10.95, still down 4 per cent. GM stock fell more than 3 per cent, while Fiat Chrysler shares tumbled over 4 per cent. Toyota and Nissan shares, however, rose slightly.

While sales still are healthy, automakers are offering deals to compete for a piece of the shrinking pie. But there are signs that the industry is relying too heavily on incentives.

The average price paid per vehicle is starting to wane after years of steady increases, even for popular SUVs. Previously SUV prices kept growing while car prices fell due to sagging demand.

The average price paid for an SUV in April was $33,165, according to the consulting firm J.D. Power and Associates. That was down 2 per cent from last April. One reason for the decline was that more customers were buying smaller, less expensive SUVs this year. But another was a whopping 18 per cent increase in incentives, which hit $3,338 per vehicle.

Jeff Schuster, a senior vice-president at the forecasting firm LMC Automotive, said automakers are fiercely competing so they don’t lose sales in the hot SUV market. But that can lead to inflated demand, overproduction and ever-higher incentives.

“This will have to balance with natural demand at some point relatively soon or the industry will be heading into potential troubled waters and unhealthy habits,” he said.

Before the 2008 financial crisis, automakers were relying on incentives to boost sales and preserve market share, to the point that they were losing money on some models.

Last month, incentive spending was up 11 per cent on cars, to $3,903 per vehicle. The average price paid for a car was $25,516, which was about the same as last year.

Pickup trucks were the only segment in which automakers offered fewer deals. Incentive spending was down 6 per cent to $3,276 per vehicle. Customers were willing to pay $31,438 for a pickup in April, which was 1 per cent more than a year ago.

Just Posted

New Alberta dental fee guide calls for 8.5% reduction in fees

A new dental fee guide has been announced in Alberta that the… Continue reading

Lacombe ready to light the night

The Christmas spirit comes to Lacombe Thursday night with the start of… Continue reading

Opioid prescriptions up across country, but daily doses dispensed down: report

TORONTO — The overall number of prescriptions for opioids has increased over… Continue reading

Notley pleads with political foes, allies to support Alberta pipeline projects

OTTAWA — Alberta Premier Rachel Notley issued warnings to all political parties… Continue reading

Uber isn’t saying how many Canadians were affected by year-old hack

TORONTO — Uber is owning up to a year-old security breach that… Continue reading

VIDEO: Replay Red Deer: Nov. 19

Watch news highlights from the week of Nov. 13

Creationist will speak at home-schooling convention in Red Deer

Ken Ham has debated Bill Nye on the Earth’s origins

Update: Innisfail girl found

A 15-year-old missing Innisfail girl has been located safe and sound. Police… Continue reading

Cost to fix Phoenix pay system to surpass $540 million, auditor general says

The federal government’s chronic salary struggles will take more time and more… Continue reading

Red Deer Christmas Bureau to help 1,300 children this year

Demand is high, but Red Deer always provides

CP Holiday train makes stops in Central Alberta

The popular train will feature entertainment from Colin James and Emma-Lee

Kittens rescued after allegedly being tossed from vehicle

Couple finds abandoned kittens new home through Facebook

VIDEO: ‘Party bus’ goes up in flames in Vancouver

Fire crews responded to the late night blaze

Chicken crosses B.C. road, stops traffic

Rooster makes early morning commuters wait in Maple Ridge

Most Read


Five-day delivery plus unlimited digital access for $185 for 260 issues (must live in delivery area to qualify) Unlimited Digital Access 99 cents for the first four weeks and then only $15 per month Five-day delivery plus unlimited digital access for $15 a month