Major automakers on Tuesday reported weak U.S. sales for March and the first quarter, citing a rough start to the year, but said a robust economy and strong labour market should encourage consumers to buy more vehicles as 2019 rolls on.
Passenger-car sales suffered throughout the January-March quarter compared with the same period in 2018 as Americans continued to abandon them in favour of larger, more comfortable pickup trucks and SUVs, which are far more profitable for automakers.
The battle for market share in the particularly lucrative large-pickup truck market intensified in the quarter, as Fiat Chrysler Automobiles NV’S (FCA) Ram brand outsold the U.S.’ No. 1 automaker General Motors Co’s Chevrolet-brand trucks.
The two automakers have both launched redesigned pickup trucks. Ford Motor Co has for decades built the single best-selling truck brand in its F-Series trucks, with the Chevy brand a solid No. 2 and Ram a distant third.
In the fourth quarter, the Chevy and Ram brands were tied for second place behind Ford.
GM said versions of its new Silverado pickup trucks that are already on the market rose 20 per cent in the first quarter versus sales of the old model in 2018. GM said it is still ramping up production of remaining variants of the truck.
Overall, U.S. new-vehicle sales are expected to decline in 2019 after a long bull run since the end of the Great Recession, led by falling passenger car sales. Competition in the high-margin SUV market is intensifying.
Ford on Tuesday unveiled details of the latest version of its Escape SUV, heavily emphasizing comfort features including a movable rear seat to provide more leg room for passengers, plus consumer-friendly features such as an 8-inch (20.3 cm.) touch screen and Wi-Fi connection for up to 10 devices within 50 feet (15.2m) of the vehicle.
GM’s first-quarter sales fell 7 per cent, with declines across all brands. Sales of Silverado pickup trucks fell nearly 16 per cent and the high-margin Chevy Suburban large SUV dropped 25 per cent.
GM and Ford do not report monthly sales.
Ford is due to release its first-quarter sales figures on Thursday. According to industry data, Ford’s sales fell 2 per cent in the quarter and 5 per cent in March.
Ford representatives did not immediately respond to requests for comment.
FCA reported a 7 per cent fall in U.S. sales in March and a 3 per cent drop for the first quarter. All of FCA’s brands dropped in March, except for Ram, which saw a 15 per cent increase in pickup truck sales.
“The industry had a tough first quarter, but with spring finally starting to show its face and continued strong economic indicators ... we are confident that new vehicle sales demand will strengthen going forward,” FCA’s U.S. head of sales, Reid Bigland, said in a statement.
Toyota Motor Corp reported a 3.5 per cent fall in U.S. sales in March and 5 per cent for the first quarter, hurt by declining demand for its Corolla sedans and Camry vehicles.
“While some of our competitors are abandoning sedans, we remain optimistic about the future of the segment,” Toyota said in a statement.
Nissan Motor Co Ltd posted a 5.3 per cent drop in sales in March, and its first-quarter sales were down 11.6 per cent.
Honda Motor Co Ltd and Hyundai Motor Co bucked the trend. Honda’s U.S. sales rose 4.3 per cent in March and 2 per cent in the quarter, while Hyundai’s were up 1.7 per cent and 2.1 per cent, respectively.
Industry consultants J.D. Power and LMC Automotive had predicted a 2.1 per cent drop in U.S. auto sales in March, partly due to bad weather, mixed economic data and lower tax refunds.