Nissan, GM sales edge up on deals, strong truck volume

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March generated record U.S. truck volume of 77,258 at the Nissan brand. Photo credit: DAVID PHILLIPS

UPDATED: 4/3/17 9:38 am ET

Nissan Motor and General Motors posted higher March sales on fatter deals and continued strong demand for trucks.

Nissan Motor’s volume rose 3.2 percent last month behind strong demand for crossovers, a double-digit increase in incentives and a big jump at Infiniti.

Volume edged up 0.5 percent at the Nissan brand and 33 percent at Infiniti. Nissan Motor said car volume dropped 15 percent while truck sales surged 29 percent, with record truck volume of 77,258 at the Nissan brand.

ALG estimates Nissan’s average incentive on new vehicles rose to $4,074 last month, 18 percent higher than a year earlier.

At GM, volume rose 1.6 percent last month on a 5 percent rise in retail sales and a double-digit increase in discounts. (See chart below.) Volume rose 12 percent at GMC and 15 percent at Buick, but slipped 2.2 percent at Chevrolet and 1.5 percent at Cadillac. 

Volume dropped 7.2 percent at Ford Motor Co. behind a 17 percent drop in fleet shipments, 24 percent plunge in car sales and a 1.5 percent dip in retail demand. Sales declined 7.5 percent at the Ford division and 1.4 percent at Lincoln. 

Honda Motor Co. posted a slight decline in March U.S. light-vehicle sales as record truck demand failed to overcome weaker car volume and sharply lower Acura deliveries.

Sales at the Honda brand rose 1.8 percent but dropped 21 percent at Acura.

American Honda said its truck sales rose 8.4 percent, setting a March record at the Honda division — 61,975, up 13 percent — while car demand skidded 8.7 percent, with Accord deliveries dropping 12 percent and Civic volume down 4 percent. 

Cars over trucks

Analysts say automakers are being forced to hike deals on new cars as consumers continue to migrate to light trucks.

Even with the March decline in Civic deliveries, volume reached nearly 32,000 and Honda said the compact car was the best-selling passenger car in America on a retail basis in the first quarter of 2017.

“Many automakers are looking for signs of market stability as consumers continue to head towards trucks and SUVs,” said Jeff Conrad, general manager of the Honda Division. “But cars are still a compelling choice for many, especially when you have the right formula.”

When sales from other automakers are tallied later today, U.S. light-vehicle sales in March will rise to their highest level for the month since 2000, according to analysts’ forecasts.

After hitting a record high of 17.54 million in 2016, capped by a strong December, U.S. auto sales dropped 1.5 percent this year through February, even as automakers dangled fatter discounts.

Amid the decline, consumers continue to migrate to crossovers and SUVs. J.D. Power says light trucks accounted for 61.5 percent of new-vehicle sales in the first two weeks of March. That would mark the highest level ever for the month and the ninth straight month that crossovers, SUVs, vans and pickups represented more than 60 percent of U.S. light-vehicle volume.

SAAR outlook

The seasonally adjusted annualized sales rate was forecast to rise to 17.2 million last month — from 16.66 million in March 2016 – while trailing the identical 17.57 million paces of February and January. GM today estimated the March SAAR at 17 million.

Ahead of today’s reports, volume was projected to rise 7 percent at General Motors, 4.9 percent at Honda, 2.8 percent at Nissan, 8.6 percent at Volkswagen/Audi and 0.4 percent at Fiat Chrysler, a survey of analysts by Bloomberg found. Deliveries were projected to drop 5.9 percent at Ford Motor Co., 1.2 percent at Toyota Motor Corp. and 3.8 percent ay Hyundai/Kia.

J.D. Power and LMC Automotive say per-vehicle incentive levels were on track to set a record for March at $3,768.

While favorable deals, low-financing rates, attractive lease deals and a solid economy continue to support sales, rising interest rates and falling used-vehicle prices threaten growth in 2017 following seven straight years of expansion

Inventories are increasing. The average number of days a new vehicle sat on a dealer lot before being sold reached 70 in the first 19 days of March, J.D. Power says. That’s the highest level for any month since days-to-turn hit 80 in July 2009, during the Great Recession.

March will be the ninth consecutive month in which new-vehicle incentives average at least 10 percent of average transaction prices, which hit a March high of $31,074, according to J.D. Power.

ALG estimates incentives rose 13 percent from March 2016 to $3,511 last month, with General Motors, Fiat Chrysler, Nissan and Ford being the top spenders. (See chart below.)

Among major automakers, the biggest rise, percentagewise, in incentives last month occurred at Subaru, American Honda, GM and Nissan. BMW is the only one of the 12 largest automakers whose incentives declined last month from March 2016.

“Car manufacturers have capacitized to a 19 million or 20 million SAAR,” Morgan Stanley analyst Adam Jonas said in a report last week that forecast steep declines of 25 to 50 percent in used car prices over the next two years. “At this point in the cycle, we start seeing more money ‘on the hood’ to move the metal.”

March U.S. incentive outlays

Manufacturer Incentive per unit/March 2017 Forecast Incentive per unit/March 2016 Incentive per unit/Feb. 2017 Incentives per unit % change vs. March 2016 Incentives per unit % change vs. Feb. 2017
BMW $4,514 $5,128 $4,245 -12% 6.3%
Daimler $4,151 $3,714 $4,111 12% 1.0%
FCA $4,327 $4,043 $4,362 7% -0.8%
Ford $3,983 $3,509 $4,011 14% -0.7%
GM $4,892 $4,029 $5,125 21% -4.5%
Honda $1,941 $1,528 $1,886 27% 2.9%
Hyundai $2,341 $2,193 $2,342 6.7% -0.1%
Kia $2,945 $2,838 $2,978 3.8% -1.1%
Nissan $4,074 $3,466 $4,080 18% -0.2%
Subaru $901 $568 $950 59% -5.2%
Toyota $2,208 $2,082 $2,259 6.1% -2.3%
Volkswagen Group $3,808 $3,348 $3,789 14% 0.5%
Industry $3,511 $3,096 $3,587 13% -2.1%

Source: ALG

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