Editor's note: Earlier versions of this story misstated the seasonally adjusted annualized sales rate for January 2016.
U.S. light-vehicle sales dipped 1.9 percent in January with consumers and automakers taking a break after a robust December fueled by heavy promotions and more generous deals.
In what is typically the weakest month of the year, Nissan Motor Co. and Honda Motor Co., behind fatter deals and strong truck demand, posted gains while volume fell at the Detroit 3, Toyota and Hyundai-Kia.
Still, the seasonally adjusted annualized sales rate in January remained strong -- slipping to 17.57 million from 17.87 million in January 2016, and easily exceeding a projection of 17.3 million for the month, according to the average of 11 analyst estimates compiled by Bloomberg. The SAAR hit a 2016 high of 18.38 million in December.
“Coming off a record December and year in 2016, the industry in January took a bit of a pause,” said Bill Fay, group vice president and general manager of the Toyota division.
Volume rose 6.2 percent at Nissan behind higher discounts and record crossover, truck and SUV demand, with deliveries rising 3.6 percent at the Nissan division and 36 percent at Infiniti. Honda Motor, with record January truck deliveries, said sales rose 5.9 percent, with a 7.7 percent increase at the Honda division countering a 10 percent decline at Acura.
"Our conservative approach to growth was criticized when the industry was growing faster but it is clearly paying dividends now as industry sales are flattening," said Jeff Conrad, senior vice president and general manager of the Honda Division. "A steady cadence of products and disciplined sales tactics is the right approach for customers and dealers."
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.
At Hyundai-Kia, volume declined 1.4 percent.
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 with fatter deals. Nissan's average U.S. incentive rose 24 percent last month to $4,335, according to ALG. At Honda, average incentives jumped 34 percent to $2,231 in January, ALG estimated.
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, 6.8 percent at Subaru and 10 percent at Mazda. Volvo's deliveries skidded 17 percent.
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 Wednesday's results, sales were expected to drop 2 percent at Toyota Motor Sales, 2.1 percent at Hyundai-Kia, 2.4 percent at GM, 2.8 percent at Ford, and 14 percent at FCA, 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. In January, car deliveries slumped 13 percent while light-truck sales rose 5.8 percent.
While Ford is trimming some output in the first quarter, mostly on the car side, the company's top sales official in North America told analysts and journalists on Wednesday that Ford sees a strong period of sales in the months ahead. “We will continue building inventory into the spring,” Mark LaNeve, Ford’s sales chief, said during a conference call.
Rising inventories and higher discounts 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.