U.S. auto sales dropped 2.3 percent last month, with the Detroit 3 and Toyota posting lower volume while Nissan, Honda and Hyundai managed increases as the industry failed to record its first gain of the year, even with the help of an extra selling day, amid the key spring selling season.
The seasonally adjusted, annualized pace of sales for April tumbled to 16.41 million -- far below the 16.8 million forecast based on a survey of 10 analysts by Bloomberg. The April sales rate -- the lowest since 15.54 million in Feb. 2014 -- was also down sharply from 17.42 million in March and April 2018’s 17.25 million rate.
"Forecasters have been expecting the market to slow as higher vehicle prices and higher borrowing costs squeeze many potential buyers," said Charlie Chesbrough, senior economist for Cox Automotive. "And indeed, the sales lion that surprised many in March became a much weaker lamb in April, as revealed in today’s numbers. Robust employment conditions and a strong stock market didn’t seem to be enough to lift sales last month."
Cars continued to struggle with demand falling 7.9 percent in April, while truck deliveries rose 0.3 percent.
Ford's sales dropped 4.7 percent, with the Ford division down 4.7 percent and Lincoln off 6.2 percent, according to the Automotive News Data Center. Ford's total car deliveries skidded 21 percent last month, while utility vehicle sales fell 9.1 percent and pickup volume jumped 7.3 percent, helped by healthy demand for the F series and the revived Ranger.
General Motors' sales dropped an estimated 2.6 percent last month, according to the Automotive News Data Center. April marked the fifth straight month GM deliveries have dropped year over year.
GM and Ford no longer release monthly U.S. sales results publicly.
FCA reported a 6.1 percent decline, with an increase in Ram sales offset by weaker Jeep deliveries. Volume dropped 4.4 percent at Toyota Motor behind lower car sales, while deliveries rose 0.1 percent at American Honda, 0.7 percent at Hyundai and 9 percent at Nissan Motor Co. April snapped a 3-month skid for Nissan.
At FCA, sales rose 25 percent at Ram, with pickup sales jumping 25 percent to 49,106, but volume fell 7.6 percent at Jeep, 24 percent at Dodge, 37 percent at Chrysler and 34 percent at Fiat.
Sales at Jeep, FCA's biggest division, have now slipped four straight months year over year. In April, Wrangler demand fell 25 percent and Cherokee volume dropped 13 percent.
The company’s U.S. sales have now declined three consecutive months. FCA dialed back on incentives last month but the company is still offering some of the highest discounts among major automakers.
"April marks the start of the spring selling season and we anticipate strong consumer spending as we move through May,” said Reid Bigland, head of U.S. sales for FCA US. "The industry may be shaking off the first-quarter sluggishness, but shoppers are coming into showrooms and buying."
FCA goes quarterly
Separately, FCA US, following GM and Ford, said Wednesday it will no longer report U.S. and Canada sales on a monthly basis. The change will take effect after midyear.
“A quarterly sales reporting cadence will continue to provide transparency of our sales results while at the same time aligning with where industry practice is heading,” said Niel Golightly, FCA’s chief communications officer.
At Toyota, April deliveries fell 4.8 percent at the Toyota division and 1.3 percent at Lexus, with car sales at the two brands falling a combined 14 percent in April and light-truck volume up 1.9 percent. U.S. deliveries at Toyota Motor Sales have now dropped 6 straight months year over year.
American Honda said volume edged up 0.2 percent at the Honda division but dipped 1.7 percent at Acura. Nissan Motor Co. sales rose behind a 11 percent increase at the Nissan brand, offsetting a 5.2 percent decline at Infiniti.
Among other automakers, Subaru extended its streak of year-over-year monthly gains to 89 with April volume rising 7.7 percent. Hyundai's sales rose 0.7 percent, Kia gained 1.6 percent and Mazda fell 15 percent, extending its streak of monthly declines to ten. Deliveries dropped 13 percent at Mitsubishi and 30 percent at Mini.
Sales fared better last month for many luxury brands, with volume up 1.4 percent at BMW, 11 percent at Land Rover, 6.3 percent at Jaguar, 56 percent at Genesis and 0.4 percent at Volvo. Audi sales skidded 21 percent, 15 percent at Mercedes-Benz and 9.9 percent at Porsche.
Before April results were released, overall industry volume had been projected to rise slightly, with lower retail volume offset by higher fleet shipments. But fleet demand came in weaker than expected, some analysts said.
While U.S. unemployment remains at historic lows, rising interest rates and record-high new-vehicle prices continue to undermine retail demand, analysts say, driving more shoppers to used-car lots.
April can be a pivotal month, as tax refunds come in and warmer weather entices consumers to get out and drive. With U.S. new-vehicle sales down 3.2 percent in the first quarter and inventories piling up some automakers and dealers ratcheted up promotions to jump into the spring selling season.
VW offered many 2019 leases that required “zero down, zero deposit, zero payment for the first month.” Some Fiat Chrysler dealers deferred payments for three months for consumers that leased a new Jeep. And some Honda dealers tried to entice consumers with 36-month leases on a CR-V LX for $272 a month and just $1 down.
Most analysts expect U.S. light-vehicle sales to drop below 17 million in 2019 for the first time since 2014. In the first quarter, sales ran at a 16.8 million rate. Sales are now down 3.0 percent through April.
J.D. Power, which expects 2019 U.S. sales to total 16.9 million, says new-model launches should provide a lift in the second half; nearly two-thirds of new models have yet to be launched and the number of redesigned models is forecast to jump 13 percent compared with 2018.