March sales rise 3.1%, but SAAR falls to 13-month low

U.S. light-vehicle sales rose 3.1 percent in March, but the pace of deliveries slowed considerably as retail growth slackened during the month, even with a spike in discounts. Some automakers and analysts blamed an early Easter holiday for putting a dent in late-March showroom traffic and retail sales.

The seasonally adjusted sales rate slipped to 16.56 million -- well below forecasts of 17.3 million -- from 17.14 million in March 2015. The February SAAR came in at 17.53 million.

The pace of sales last month is the lowest since the SAAR came in at 16.39 million in February 2015. The SAAR topped the 17 million mark for 10 straight months until March.

'While it will take a week to get the final details around pricing and fleet, the quality of the [March] SAAR ... is incrementally weaker," Barclays analyst Brian Johnson said in a note to investors on Friday. "Incentives are higher, capacity is coming on line, fleet sales are up, and residuals are coming down."

Nissan, Honda, Fiat Chrysler and Ford Motor chalked up solid U.S. sales gains as higher spending on incentives and strong demand for light trucks lifted the industry to another monthly advance.

Nissan North America led the way with a 13 percent jump in March deliveries. Volume rose 9.4 percent at American Honda Motor, with sales up 11 percent at Honda Division and 1.2 percent at Acura.

FCA US and Ford Motor Co. each came in with advances in the 8 percent range. General Motors deliveries rose 0.9 percent while again touting a rise in retail sales and a drop in less-profitable fleet deliveries. Volume dropped for the second month this year at Toyota Motor Sales U.S.A.

Volume at Nissan Division advanced 13 percent to a record 149,784 cars and light trucks. Deliveries rose 10 percent at Infiniti.

Sales of Nissan-branded crossovers, pickups and SUVs set a monthly record, with volume rising 9 percent, the company said today. Nissan Division’s car lineup also set a record, with deliveries of 88,278, an increase of 16 percent.

Overall, the Nissan group’s car volume rose 13 percent in March while truck sales jumped 12 percent. Nissan’s U.S. incentives averaged $3,362 a vehicle last month, an increase of 5.6 percent over March 2015, TrueCar estimated.

Detroit 3

At Ford Motor Co., sales increased 7.8 percent, with volume rising 7.6 percent at the Ford division and 11 percent at Lincoln. Across the Ford and Lincoln lineups, truck volume rose 11 percent, utility vehicle sales jumped 14 percent and car deliveries skidded 1.6 percent last month.

"Customers continue buying high-end SUVs and trucks, helping the Ford brand increase its average transaction prices by more than $1,600 per vehicle in March -- nearly double the industry average,” Mark LaNeve, Ford's vice president for U.S. marketing, sales and service, said in a statement. “We have been seeing solid sales momentum in the first quarter across our entire portfolio."

FCA US, led by another strong month for Jeep and higher discounts, posted an 8.1 percent rise in March U.S. sales, marking the 72nd consecutive month that the company’s U.S. deliveries have advanced year over year.

Volume advanced 15 percent at Jeep and 11 percent at the Ram and Dodge brands, while deliveries skidded 13 percent at the Chrysler brand and 24 percent at Fiat, FCA said.

Overall, the company’s light-truck sales rose 23 percent while car volume skidded 34 percent.

“As consumers continue to shift their buying preference toward utility vehicles and trucks, they are walking directly into the FCA wheelhouse,” said Reid Bigland, head of sales for FCA North America.

TrueCar estimates that FCA’s spending on U.S. incentives rose 14 percent in March to $3,887 per vehicle.

At GM, volume rose 1.4 percent at Chevrolet and 6.9 percent at GMC, while deliveries dropped 11 percent at Buick and 5.1 percent at Cadillac.

GM this year is scaling back rental shipments to focus on retail volume. The company said it delivered 193,524 vehicles to individual or “retail” customers in March, an increase of 6 percent. The gains reflect a 7 percent increase in retail volume at Chevrolet and a 13 percent jump at GMC -- the automaker's two biggest divisions.

In the first quarter, GM said U.S. daily rental sales dropped by approximately 43,000 cars and light trucks, or about 36 percent, compared to the first three months of 2015.

Toyota Motor Corp. reported March sales of 219,842, a drop of 2.7 percent. Toyota Division volume dipped 2.7 percent to 189,644 and Lexus deliveries skidded 2.8 percent to 30,198.

At the Volkswagen Group, sales dipped 10 percent at the VW brand, where U.S. volume has skidded five straight months as the company grapples with emissions violations and a ban on sales of some diesel models. Audi racked up an increase of 7.5 percent, its 77th monthly gain in a row.

Among other automakers, sales rose 0.4 percent to a record 75,310 at Hyundai, 14 percent at Mitsubishi, 16 percent at Volvo and 0.4 percent at Subaru. Deliveries fell 13 percent at the BMW Group, 3.6 percent at Daimler AG and 0.8 percent at Kia.

U.S. light-vehicle deliveries, aided by low gasoline prices, rising discounts and favorable financing terms, have climbed 3.3 percent this year through March after rising 5.7 percent to a record 17.47 million in 2015.

March had 27 selling days, compared with 25 in March 2015.

“The retail sales pace in March exhibited a slower-than-normal acceleration during the month,” said Deirdre Borrego, senior vice president and general manager of automotive data and analytics at J.D. Power.

New-vehicle sales continue to be fueled by incentives, elevated leasing and long-term loans. Low gasoline prices continue to drive demand higher for pickups, SUVs and crossovers while car sales remain weak. In March, light-truck volume surged 12 percent while car deliveries slipped 6.6 percent.

Discount spending

Across the industry, TrueCar estimates incentive spending per vehicle rose 10 percent to $3,005 last month compared with March 2015. BMW AG had the highest average incentive last month at $4,816, TrueCar estimates, followed by Daimler AG ($3,981); GM ($3,943); FCA ($3,887); Nissan ($3,362); VW Group ($3,349); Ford ($3,271); Kia ($2,868); Hyundai ($2,163); Toyota ($2,027); Honda ($1,590) and Subaru ($569).

With retail sales softer, fleet was “a material swing factor” in the final industry tally for March, Wells Fargo senior analyst Richard Kwas said in a report Thursday.

Ford outsold GM by 936 light vehicles last month and fleet shipments accounted for the difference, with Ford’s rising 39 percent and GM’s dropping 13 percent.

“March incentive actions will be interesting to follow,” Kwas said in the report. “March is fiscal year-end for the Japanese 3 and truck month for the Detroit 3 has been in full gear. The Easter holiday landed on the last weekend of the month -- not ideal for retail throughput.”

Kwas anticipates retail mix will accelerate in the coming months as the industry enters the key spring and summer selling seasons.

And other analysts say the industry remains well poised to finish the year higher despite some signs the market is plateauing.

“Auto sales are not yet peaking, and the outlook for the year remains robust, even with some retail softness and noise in March,” said Jeff Schuster, senior vice president of forecasting at LMC Automotive. “In fact, year-to-date volume is still nearly 5% ahead of year-to-date March 2015, leaving some room for additional volatility and the expected slower growth rates later in the year.”