Nissan Motor Co. reported a 6.2 percent rise in U.S. car and truck sales in January while volume fell at the Detroit 3 and Toyota amid forecasts for a sluggish start to the new year across the industry.
Behind higher discounts and record crossover, truck and SUV demand, volume rose 3.6 percent at the Nissan division and 36 percent at Infiniti.
U.S. sales dropped 3.8 percent at General Motors in January after two consecutive months of 10 percent gains. Volume fell 1.9 percent at Chevrolet, 28 percent at Buick, 4.1 percent at Cadillac, but deliveries rose 1.1 percent at GMC.
At Ford Motor Co., sales fell 0.7 percent last month behind a drop of 1.8 percent at the Ford division. Deliveries surged 22 percent at Lincoln. Toyota Motor Corp. said volume dropped 11 percent, with deliveries off 9.2 percent at the Toyota division and slumping 26 percent at Lexus.
Volume skidded 11 percent at FCA US -- the company's fifth straight monthly decline, with fleet sales dropping 32 percent after the company discontinued output of the Dodge Dart and Chrysler 200. Deliveries at Jeep, one of the hottest brands in recent years, also fell for the fifth consecutive month. Only two FCA brands -- Ram, up 5 percent, and Alfa Romeo, up 59 percent -- posted gains for the month.
Overall, U.S. light-vehicle sales are expected to fall slightly -- by no more than 3 percent -- last month compared with January 2016, according to analysts. Demand is expected to taper off in January -- typically the weakest month of the year -- after a robust December fueled by heavy promotions and more generous deals.
“Coming off a record December and year in 2016, the industry in January took a bit of a pause with volume down slightly vs. a year ago,” said Bill Fay, group vice president and general manager of the Toyota division.
Nissan posted the biggest U.S. sales gain in 2016 -- 5.4 percent -- of all major automakers, and the company's January results signal some automakers may still have room to grow in 2017 behind fatter deals. Nissan's average U.S. incentive rose 24 percent last month to $4,335, according to ALG.
GM's retail volume dipped 5.9 percent and the company cited low stockpiles of certain truck models for the results.
“In early January, we focused on profitability while key competitors sold down their large stocks of deeply discounted, old-model-year pickups,” Kurt McNeil, U.S. vice president of sales operations for GM, said in a statement. “We gained considerable sales momentum as we rebuilt our midsize pickup, SUV and compact crossover inventories from very low levels following record-setting December sales.”
Audi reported a January sales gain of 11 percent, its 73rd straight record month, behind strong truck and sedan volume. Sales rose 17 percent at the VW brand and 10 percent at Mazda.
The seasonally adjusted annualized sales rate for January is projected to drop to 17.3 million vehicles from 17.62 million a year earlier, according to the average of 11 analyst estimates compiled by Bloomberg. GM today, however, estimated the SAAR for January will come in at 17.6 million, signaling more underlying strength in the market.
Automakers sold a record 17.54 million cars and light trucks in the U.S. in 2016 -- extending the industry’s annual gains to seven straight years.
Among major automakers, only Honda Motor Co. and Volkswagen AG were forecast to post an increase in January volume -- 4 percent at Honda and 20 percent at VW as the German automaker rebounds from diesel emissions violations that dented sales in late 2015 and for most of 2016.
Ahead of today's results, sales were expected to drop 2 percent at Toyota Motor Sales, 2.1 percent at Hyundai-Kia, 2.4 percent at General Motors, 2.8 percent at Ford Motor Co., and 14 percent at Fiat Chrysler Automobiles, according to analysts surveyed by Bloomberg.
While the light-truck market is robust -- rising 7.4 percent in 2016 -- car demand remains weak, forcing some companies to fatten deals and idle plants that build sedans and coupes.
Rising inventories and higher incentives in some light-truck segments also have analysts fretting about the quality of the retail market.
“Incentive spending is a concern as it continues to rise across the industry, and another record in 2017 would likely require undisciplined sales tactics driven by incentives, leasing and longer-loan terms,” Kelley Blue Book said.
ALG estimates new-vehicle incentives rose 22 percent last month to $3,635 from $2,990 in January 2016. Every major automaker hiked incentives last month by 10 percent or more, with the biggest increases coming from Ford, Honda and Hyundai-Kia. (See chart below.)
Falling used-vehicle prices -- driven by a rise in off-lease vehicles -- will put downward pressure on industry sales this year even as low interest rates, a stable economy and steady employment gains support volume.
But some analysts believe industry sales may keep rising in 2017 if President Trump’s deregulation efforts to spur faster economic growth are successful.
“A lot has changed, particularly in Washington, D.C.,” Steven Szakaly, chief economist at the National Automobile Dealers Association, said last week at the group's national convention in New Orleans. “Let’s say that Trump passes all of his tax cuts and all of his infrastructure spending. That is going to be a big boost to economic growth and economic activity.”
If that happens, Szakaly said, the industry could "easily" see another year or two of 17.4 million to 17.5 million new-vehicle deliveries.
“Obviously, the likelihood of everything getting passed is very, very low," he added, "so it will likely be some kind of mix that will have some level of positive impact on our pre-election baseline [of 17.1 million new-vehicle sales in 2017].”
U.S. incentive outlays
|Manufacturer||Incentive per unit Jan. 2017 forecast||Incentive per unit Jan. 2016||Incentive per unit December 2016||Incentive per unit % change vs. Jan 2016||Incentive per unit % change vs. Dec 2016|