DETROIT — Most main automakers on Wednesday reported decrease December U.S. gross sales and have been forecasting weaker total gross sales in 2018. However buyers bid up shares within the sector on a guess that high-margin pickup vans and SUVs will pull Detroit’s automakers via any downturn.
The December numbers have been above analyst expectations, lifting the shares of Common Motors, Ford and Fiat Chrysler Vehicles. In line with Autodata Corp, which tracks trade gross sales, the seasonally adjusted annualized price (SAAR) of U.S. automotive and light-weight truck gross sales in December fell to 17.9 million items, from 18.2 million in December 2016.
Analysts polled by Reuters had predicted a SAAR for December of 17.5 million items.
Buyers have been happy GM had reduce its stock of unsold autos — a priority for the trade earlier in 2017 — on the finish of December to 63 days’ provide of unsold autos, beating its goal of round 70 days provide.
However GM stated it expects the trade to promote fewer than than 17 million new autos in 2018. In accordance Autodata, 2017 full-year gross sales hit 17.23 million items, down almost 2 % from an all-time U.S. document of 17.55 million items in 2016.
GM shares closed up 2.four %, Ford shares ended up zero.eight % and Fiat Chrysler closed up 2.four %.
Automakers’ challenges in 2018 embrace coping with an ongoing shift in client choice away from passenger vehicles to extra worthwhile pickup vans and SUVs, and an inflow of thousands and thousands of nearly-new, off-lease autos which can be cheaper than new autos.
Automakers are nonetheless assessing the potential impacts of rising rates of interest and the sweeping tax overhaul handed by the Republican-controlled U.S. Congress final month.
Charlie Chesbrough, chief economist at Cox Automotive, proprietor of the Autotrader on-line vehicle market and Kelley Blue E-book automotive valuation service, stated the group expects 2018 gross sales to hit 16.7 million items, and rising rates of interest are one of many trade’s challenges this yr as they enhance month-to-month automotive funds.
“That is actual cash to shoppers,” Chesbrough stated on a convention name.
Ford chief economist Emily Kolinski Morris stated on a convention name that rates of interest are a “headwind, however a really minor one.” Tax cuts, nevertheless, must be a “web optimistic” for the trade, she added.
Scott Keogh, U.S. head of Audi AG, stated that whereas tax cuts would assist luxurious shoppers, new federal limits on native and state tax deductions might harm gross sales in New York and Los Angeles, the 2 largest American luxurious car markets.
Shopper reductions additionally stay a priority for the trade. Reductions of greater than 10 % of a car’s sticker worth can harm resale values, in flip weighing on new car gross sales. In December, auto consultancies J.D. Energy and LMC estimated reductions had topped 10 % for the 17th time within the final 18 months.
Mark Wakefield, world co-head of automotive and industrial consulting at consultancy AlixPartners LLP — which expects U.S. trade gross sales to drop to 16.6 million in 2018 — stated to date excessive reductions haven’t harm automakers an excessive amount of, however pricing self-discipline is an actual concern shifting ahead.
“What we’re actually nervous about is that if somebody defects and provides $1,000 to the hood… and forces others to answer shield market share,” Wakefield stated.
GM reported a three.three % drop in gross sales in December, pushed by a decline in lower-margin fleet gross sales to authorities companies and rental automotive firms. GM’s retail gross sales have been up 1.eight %.
The automaker stated its common transaction worth hit $35,400 in 2017, above the trade common of $31,600.
The No. 2 U.S. automaker noticed a zero.9 % enhance in gross sales for December, fueled by a 17 % enhance in fleet gross sales. Ford stated its retail gross sales have been down four %.
Fiat Chrysler posted an 11 % gross sales lower, with retail gross sales dropping three %. Fleet gross sales slumped 42 %, in keeping with an organization technique during the last yr to chop again on this low-margin option to unload product.
Gross sales fell eight.three % in December, with decreases throughout all segments.
Honda / Acura
A 7 % drop in gross sales in December, pushed principally by declining passenger automotive gross sales. However Honda and Acura set its third consecutive U.S. gross sales document, up zero.2 % over 2016, with greater than 1.6 million autos offered. Civic, CR-V, HR-V and RDX have been massive sellers.
Nissan / Infiniti
A 9.5 % drop in gross sales. Infiniti was down 10 % for the month however up 11 % for the yr, its greatest ever.
Hyundai / Genesis
Reported December gross sales of 63,594, a 2 % enhance over December 2016. Genesis alone was up 12 %. However total annual gross sales have been down 12 % from the yr earlier than.
Gross sales have been up 1.6 % in 2017, with almost 600,000 gross sales.
December gross sales have been up four.three % however down 2.four % for the yr.
Volkswagen, Audi, Porsche
VW of America model gross sales have been off 18 % in December however up 5.2 % for the yr. Audi set a gross sales document, up 16.three % for the yr. And Porsche annual gross sales have been up 2.1 %.
Down 6.5 % for December, down 2.eight % in 2017.
December gross sales have been up 10 %. Gross sales of Mercedes-AMG fashions have been up 46 % for the yr, however total MBUSA annual gross sales have been off 11.four %.
Jaguar Land Rover
Up 9 % for the yr.
Annual gross sales have been up 7.7 %, at 103,686 autos.
The corporate posted document ends in 2017.
Reporting by Nick Carey
!function(f, b, e, v, n, t, s) (window, document, ‘script’, ‘//connect.facebook.net/en_US/fbevents.js’); fbq(‘init’, ‘174181139752304’); fbq(‘track’, ‘PageView’);