Discounts to drive U.S. sales to best March since 2000, analysts say
Skip to main content
Sister Publication Links
  • Automotive News Canada
  • Automotive News Europe
  • Automotive News Mexico
  • Automotive News China
AN-LOGO-BLUE
Subscribe
  • Subscribe
  • Account
  • login
  • HOME
  • NEWS
    • Dealers
    • Automakers & Suppliers
    • News by Brand
    • Cars & Concepts
    • Shift
    • Mobility Report
    • Special Reports
    • Digital Edition Archive
    • Q&A with Chris Bangle
      A penny for your thoughts
      Helping two cultures connect
      SEAT FEAT
    • Lyft plans to file for IPO next week, reports say
      Apple sheds light on safety of its AV program
      GM launches 'Vehicle Locate' app
      Audi expanding regions where drivers can 'ride the green wave'
    • Dealerships owned by ex-NFL stars face collapse, litigation
      Want a luxury car? Try a Kia
      Costly lesson of tortuous legal battle: Get it in writing
      Denny Hecker: A changed man?
    • Access F&I
    • Fixed Ops Journal
    • Marketing
    • Used Cars
    • Sales
    • Best Practices
    • Dealership Buy/Sell
    • NADA
    • NADA Show
    • Automakers
    • Manufacturing
    • Suppliers
    • Regulations & Safety
    • Executives
    • Leading Woman Network
    • PACE Awards
    • CES
    • Management Briefing Seminars
    • World Congress
    • Aston Martin
    • BMW
      • Mini
      • Rolls Royce
    • Daimler
      • Mercedes Benz
      • Smart
    • Fiat Chrysler
      • Alfa Romeo
      • Chrysler
      • Dodge
      • Ferrari
      • Fiat
      • Jeep
      • Maserati
      • Ram
    • Ford
      • Lincoln
    • General Motors
      • Buick
      • Cadillac
      • Chevrolet
      • GMC
      • Holden
    • Honda
      • Acura
    • Hyundai
      • Genesis
      • Kia
    • Mazda
    • Mitsubishi
    • Nissan
      • Infiniti
    • PSA
      • Citroen
      • Opel
      • Peugeot
      • Vauxhall
    • Renault
    • Subaru
    • Suzuki
    • Tata
      • Jaguar
      • Land Rover
    • Tesla
    • Toyota
      • Lexus
    • Volkswagen
      • Audi
      • Bentley
      • Bugatti
      • Lamborghini
      • Porsche
      • Seat
      • Skoda
    • Volvo
    • (Discontinued Brands)
    • Auto Shows
      • Detroit Auto Show
      • New York Auto Show
      • Los Angeles Auto Show
      • Chicago Auto Show
      • Geneva Auto Show
      • Paris Auto Show
      • Frankfurt Auto Show
      • Toronto Auto Show
      • Tokyo Auto Show
      • Shanghai Auto Show
      • Beijing Auto Show
    • Future Product Pipeline
    • Photo Galleries
    • Car Cutaways
    • Design
  • OPINION
    • Blogs
    • Cartoons
    • Keith Crain
    • Automotive Views with Jason Stein
    • Columnists
    • Editorials
    • Letters to the Editor
    • Send us a Letter
    • Is Honda's U.K. plant closure the beginning of a Japanese Brexit?
      Tesla introduces 'Dog Mode' to keep pets cool inside the car
      A GM investment in Rivian would send the wrong messages
      Bad policy, worse political strategy on auto tariffs
    • Dealers need to be ready for anything
      EVs will come with economic cost
      Spend money on sales, not stores
      Put it on your bucket list
    • Feb. 15, 2019: EV startup gets Amazon, GM interest
      Jan. 4, 2019 | Bumpy road ahead for Detroit’s automakers and suppliers?
    • Bad policy, worse political strategy on auto tariffs
      Elaine Chao: A speedier path for innovation
      Drivers for ride-hailing services can be a prime source of fixed ops profits
      Dealers' ads for service techs need major repairs to be effective
    • NADA can help fight stair step incentives
      Let dealers invest in innovation, not renovations
      Hackett's vision for Ford is still a blur
      The last temptation of Elon Musk
    • Cadillac falls short on marketing, luxury
      Thank you, Sting, for Oshawa efforts
      Customer-centric approach set Tesla apart
      Deeper issues in tech shortage
  • DATA CENTER
  • VIDEO
    • AutoNews Now
    • First Shift
    • Special Video Reports
    • Weekend Drive
  • EVENTS & AWARDS
    • Events
    • Awards
    • World Congress
    • Retail Forum: NADA
    • Canada Congress
    • Marketing 360: L.A.
    • Europe Congress
    • Fixed Ops Journal Forum
    • Retail Forum: Chicago
    • Leading Women Conference Detroit
    • 100 Leading Woman
    • 40 Under 40 Retail
    • All-Stars
    • Best Dealership To Work For
    • PACE Awards
    • Rising Stars
    • Europe Rising Stars
  • JOBS
  • +MORE
    • Webinars
    • Leading Women Network
    • Custom Features
    • Classifieds
    • People on the Move
    • Newsletters
    • Contact Us
    • Media Kit
    • Ally: Do It Right
    • Guide To Economic Development
MENU
Breadcrumb
  1. Home
  2. Sales
March 30, 2017 01:00 AM

Discounts to drive U.S. sales to best March since 2000, analysts say

Nick Bunkley
  • Tweet
  • Share
  • Share
  • Email
  • More
    Print
    DAVID PHILLIPS
    Analysts are seeing more signs that the U.S. new-vehicle market is beginning to erode, even as automakers dangle more generous cash-back and lease deals to keep showrooms busy.

    U.S. new-vehicle sales are on pace for the strongest March since 2000, with fast-rising incentives expected to help the industry post its first year-over-year increase of 2017.

    Sales are projected to rise 3 percent, according to a forecast from Kelley Blue Book. Edmunds projects a 2.1 percent increase, and LMC Automotive estimates a 1.6 percent gain, while ALG is calling for only a 0.2 percent increase. The forecasts translate to an annualized sales rate of 16.9 million to 17.4 million, up from 16.66 million a year ago.

    Analysts say they are seeing signs that the market is beginning to erode, even as automakers dangle more generous cash-back and lease deals to keep showrooms busy.

    “Despite considerably higher discounts and incentives, first quarter sales totals will likely only finish flat versus last year, a signal of weakening consumer demand for new vehicles,” Tim Fleming, a KBB analyst, said in a statement. “As sales cool after years of robust growth, adjusting production accordingly and managing supply, especially in car segments, should be top priorities for automakers.”

    Automakers are scheduled to report March sales on Monday.

    March is the ninth consecutive month in which new-vehicle incentives average at least 10 percent of the sticker price, according to J.D. Power, which provides the data for LMC’s forecast. ALG data show that incentive spending climbed 13 percent from a year ago, to $3,511, with the biggest jumps, percentagewise, occurring at Subaru, American Honda, General Motors and Nissan North America. BMW is the only one of the 12 largest automakers whose incentives declined from March 2016.

    “If you only look at the sales numbers, it could be tempting to say that the industry is just as strong as it was a year ago,” Jessica Caldwell, Edmunds’ executive director of industry analysis, said in a statement Wednesday. “But there are several areas of concern this year lurking just below the surface. Inventories have reached levels not seen in more than a decade, and incentives are rising. We’re also seeing an increase in loan duration and indications of an increase in subprime lending, both of which demonstrate sales aren’t coming as easily as they used to.”

    A report from Wells Fargo last week said retail demand appears to be “losing steam.”

    But LMC said it is maintaining its full-year forecast for 2017 of 17.6 million sales, which would be 0.3 percent more than the record 17.54 million sold last year. It said there is considerable uncertainty about policies Congress or the Trump administration will enact, such as a controversial tax on imported parts and vehicles that could raise prices and reduce demand by as much as 2 million vehicles.

    GM is expected to gain nearly 1 point of market share, according to the KBB and ALG forecasts. Subaru, Honda, Nissan and Volkswagen Group of America also are projected to post above-average sales increases.

    Ford Motor Co. is forecast to post the biggest market share decline, though KBB said that would be the result of reduced fleet deliveries overshadowing a smaller increase in retail volume. Toyota Motor Sales U.S.A., Fiat Chrysler Automobiles and Hyundai-Kia are expected to lose share as well.

    KBB said SUVs and crossovers continue to pull customers away from traditional sedans, with midsize car sales falling 17 percent and midsize utilities rising 17 percent in March.

    Letter
    to the
    Editor

    Send us a letter

    Have an opinion about this story? Click here to submit a Letter to the Editor, and we may publish it in print.

    Recommended for You
    Digital Edition
    THIS WEEK'S EDITION
    See our archive
    Fixed Ops Journal
    Thumbnail
    Read the issue
    See our archive
    Sign up for free newsletters
    EMAIL ADDRESS

    Please enter a valid email address.

    Please enter your email address.

    Please select at least one newsletter to subscribe.

    You can unsubscribe at any time through links in these emails. For more information, see our Privacy Policy.

    Get Free Newsletters

    Sign up and get the best of Automotive News delivered straight to your email inbox, free of charge. Choose your news – we will deliver.

    Subscribe Now

    Get access to in-depth, authoritative coverage of the auto industry from a global team of reporters and editors covering the news that's vital to your business.

    Subscribe
    Connect With Us
    • Facebook
    • Instagram
    • LinkedIn
    • Twitter

    Our Mission

    The Automotive News mission is to be the primary source of industry news, data and understanding for the industry's decision-makers interested in North America.

    AN-LOGO-BLUE
    Contact Us

    1155 Gratiot Avenue
    Detroit, Michigan
    48207-2997

    (877) 812-1584

    Email us

    Resources
    • About us
    • Contact Us
    • Media Kit
    • Subscribe
    • Manage your account
    • Reprints
    • Ad Choices Ad Choices
    • Sitemap
    Legal
    • Terms and Conditions
    • Privacy Policy
    Copyright © 1996-2019. Crain Communications, Inc. All Rights Reserved.
    • HOME
    • NEWS
      • Dealers
        • Access F&I
        • Fixed Ops Journal
        • Marketing
        • Used Cars
        • Sales
        • Best Practices
        • Dealership Buy/Sell
        • NADA
        • NADA Show
      • Automakers & Suppliers
        • Automakers
        • Manufacturing
        • Suppliers
        • Regulations & Safety
        • Executives
        • Leading Woman Network
        • PACE Awards
        • CES
        • Management Briefing Seminars
        • World Congress
      • News by Brand
        • Aston Martin
        • BMW
          • Mini
          • Rolls Royce
        • Daimler
          • Mercedes Benz
          • Smart
        • Fiat Chrysler
          • Alfa Romeo
          • Chrysler
          • Dodge
          • Ferrari
          • Fiat
          • Jeep
          • Maserati
          • Ram
        • Ford
          • Lincoln
        • General Motors
          • Buick
          • Cadillac
          • Chevrolet
          • GMC
          • Holden
        • Honda
          • Acura
        • Hyundai
          • Genesis
          • Kia
        • Mazda
        • Mitsubishi
        • Nissan
          • Infiniti
        • PSA
          • Citroen
          • Opel
          • Peugeot
          • Vauxhall
        • Renault
        • Subaru
        • Suzuki
        • Tata
          • Jaguar
          • Land Rover
        • Tesla
        • Toyota
          • Lexus
        • Volkswagen
          • Audi
          • Bentley
          • Bugatti
          • Lamborghini
          • Porsche
          • Seat
          • Skoda
        • Volvo
        • (Discontinued Brands)
      • Cars & Concepts
        • Auto Shows
          • Detroit Auto Show
          • New York Auto Show
          • Los Angeles Auto Show
          • Chicago Auto Show
          • Geneva Auto Show
          • Paris Auto Show
          • Frankfurt Auto Show
          • Toronto Auto Show
          • Tokyo Auto Show
          • Shanghai Auto Show
          • Beijing Auto Show
        • Future Product Pipeline
        • Photo Galleries
        • Car Cutaways
        • Design
      • Shift
      • Mobility Report
      • Special Reports
      • Digital Edition Archive
    • OPINION
      • Blogs
      • Cartoons
      • Keith Crain
      • Automotive Views with Jason Stein
      • Columnists
      • Editorials
      • Letters to the Editor
      • Send us a Letter
    • DATA CENTER
    • VIDEO
      • AutoNews Now
      • First Shift
      • Special Video Reports
      • Weekend Drive
    • EVENTS & AWARDS
      • Events
        • World Congress
        • Retail Forum: NADA
        • Canada Congress
        • Marketing 360: L.A.
        • Europe Congress
        • Fixed Ops Journal Forum
        • Retail Forum: Chicago
        • Leading Women Conference Detroit
      • Awards
        • 100 Leading Woman
        • 40 Under 40 Retail
        • All-Stars
        • Best Dealership To Work For
        • PACE Awards
        • Rising Stars
        • Europe Rising Stars
    • JOBS
    • +MORE
      • Webinars
      • Leading Women Network
      • Custom Features
        • Ally: Do It Right
        • Guide To Economic Development
      • Classifieds
      • People on the Move
      • Newsletters
      • Contact Us
      • Media Kit