Car sales keep falling, but buyers pay more for trucks, SUVs

DETROIT — Passenger car sales continued to plummet last month and were a drag for many automakers, even with offers of some very juicy discounts.

For now, the auto industry isn’t worried because it’s making solid money selling reams of SUVs and trucks to consumers who are loading them up with expensive features. But some analysts see the large inventories of cars as a looming problem.

Toyota, Ford, Fiat Chrysler and Honda each reported sales declines for March, all due to tumbling car sales. General Motors, Nissan and Volkswagen sales rose due largely to SUV sales as most major automakers reported March sales figures on Monday.

Ford suffered the biggest loss with a 7.5 per cent drop, followed by Fiat Chrysler at 5 per cent, Toyota at 2 per cent and Honda at just under 1 per cent. Nissan sales were up over 3 per cent, Volkswagen’s rose just under 3 per cent and GM posted an increase of just under 2 per cent.

Analysts were expecting a 2 per cent to 3 per cent increase for the industry overall in March, the first monthly sales jump this year. But some automakers’ figures were below estimates. A final industry tally comes out later Monday.

Analysts see some warning signs in the figures and some cautioned that sales could slow later this year.

Drawing in buyers required a lot of cash, low-interest loans and other incentives. Dealer stocks are growing because cars and trucks aren’t moving off the lots as fast as they did in the past.

The LMC Automotive consulting firm said incentives hit a March record, averaging $3,768 per vehicle and the highest amount since March of 2009. In addition, cars and trucks are sitting on dealer lots for an average of 70 days, the highest level for any month since July of 2009 during the sharp economic downturn.

Jessica Caldwell, executive director of industry analysis for the Edmunds.com car-buying website, says if inventories aren’t reduced, automakers will have to offer even more incentives, which will reduce industry profits. Even some truck and SUV inventories are starting to climb, she said.

Since vehicle values could fall if demand falters, that could mean an end to sweet lease deals for consumers, she said. That could mean lower sales, production cuts and a drag on the economy in a worst-case scenario, she said.

Yet even at Ford, which saw a 24 per cent decline in car sales, executives were happy with monthly numbers largely because of a 10 per cent increase in sales of the F-Series pickup.

Vice-President of Sales Mark LaNeve said buyers are loading out the trucks with premium options, boosting average sale prices by $2,500 over a year ago.

“(Sport) Utilities and trucks are trucks are very positive in terms of our economics,” he said. “If you think about it, it means revenue is up.”

Ford’s numbers were reflected in industry figures. LMC says average prices rose to $31,074, beating the previous March high of $31,049 set last year. Caldwell said people are going for more expensive features such as leather seats, premium sound systems and electronic safety devices.

Dealers concede their inventories are on the rise, but Mark Scarpelli, owner of Chevrolet, Kia and Fiat Chrysler dealers north of Chicago, said he considers it a normal part of the business cycle.

In the Midwest, Scarpelli said, dealers build inventory during cold-weather months in preparation for the spring and summer selling seasons. “It’s how the course has been run over the past number of years,” Scarpelli, who also is chairman of the National Automobile Dealers Association. “There might be some higher inventory levels on certain car lines or truck lines, but that’s going to happen in good times or bad.”

Automakers also are raising incentives a bit to keep sales moving, he said.

At Honda, car sales fell 8.7 per cent, while truck and SUV sales rose 8.4 per cent. Fiat Chrysler’s car sales dropped 14 per cent and SUV sales were down 4 per cent. But truck sales rose 6 per cent.

GM’s gain came mainly from small and midsize SUVs with a 21 per cent increase. For example, the Buick Encore compact SUV saw a 29 per cent increase.

Nissan’s overall sales rose 3.2 per cent with trucks and SUVs rising 29 per cent for the Nissan and Infiniti brands combined. The Rogue small SUV set a March sales record of nearly 40,000 vehicles, 43 per cent increase.

Just Posted

Huge RV resort proposed for Buffalo Lake

Some residents feel 800-lot RV resort too big for area

Updated: Red Deer gets WHL Bantam Draft and Awards Banquet

WHL will holds its draft and awards ceremony in Red Deer for next three years

Land wanted for Central Alberta Foodgrains project

23rd year for Lacombe area charity

Stolen vehicle found thanks to tip from motorist

Charges laid against Red Deer man and Leduc County woman

City prepares for legal marijuana

Legalized recreational marijuana expected to have impact on many city policies

How to keep local news visible in your Facebook feed

Facebook has changed the news feed to emphasize personal connections. You might see less news.

Greyhound cleared to end routes in northern B.C., Vancouver Island

Company says nine routes have dropped 30% in ridership in last five years

Evangelist Billy Graham, who reached millions, dies at 99

MONTREAT, N.C. — The Rev. Billy Graham, who transformed American religious life… Continue reading

Amid a flood of plastic, big companies see opportunity

LONDON — Public awareness of the problem of plastic waste is swelling… Continue reading

Ambulance’s slow response time angers family

Woman suffers stroke, waits nearly an hour for ambulance

Over-burdened refugee tribunal ditches legislated timelines for hearings

OTTAWA — The Immigration and Refugee Board is giving up on following… Continue reading

Sheraton Celebrity Dance Off profile: Troy Gillard

** Sheraton Celebrity Dance Off takes place on April 14 at the Sheraton Red Deer

New mobile paramedic program starts in Red Deer

Paramedics provide on-site care to those with chronic conditions

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