The US retail automotive industry has suffered a fourth consecutive monthly drop in sales. The six largest auto manufacturers missed analysts’ estimates in April, with Ford Motor and Honda Motor reporting the sharpest declines.
Fiat Chrysler Automobiles NV’s New York-traded shares fell 5 percent in one day; Ford dropped 4 percent and General Motors shed 3.2 percent of their value. Auto-supplier shares, including BorgWarner and Delphi Automotive, also fell, as did retailers such as AutoNation and CarMax.
The industry likely fell short of analysts’ projected annualised pace of US auto sales, adjusted for seasonal trends, of about 17.1 million, slower than 17.4 million a year earlier.
With credit becoming less readily available Dealers are oversupplied, raising the possibility of greater discounting and less production.
Lenders have made it more expensive for borrowers to get once-cheap credit to buy cars. Some people can’t get financed while others consider it too expensive.
Mark LaNeve, Ford’s Vice President of US marketing, sales and service, told reporters the US market is plateauing.
“I’m not discouraged by the number,” he said. “In this kind of industry there are going to be these kinds of months.”
Industry-wide deliveries dropped in each of the first three months of 2017 and were down 1.5 percent through March, according to researcher Autodata Corp. With the market continuing to fall, it appears the US auto market is headed for its first annual contraction since 2009, the year GM and Chrysler reorganised in bankruptcy court.
GM has scheduled about 13 weeks of downtime at North American plants during the third quarter, chief financial officer Chuck Stevens told analysts. While the bulk of the idled production is related to retooling factories to make new or redesigned sport utility vehicles and pickups, the auto maker is also trimming output of the Corvette sports car at its plant in Kentucky.
Sales are declining even as auto makers have ratcheted-up discounts. Spending on incentives for the month through April 16 reached a record of US$3,499, according to
JD Power.
