As long as new car sales are surging. Arb won't be able to hit its sales target
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TOP NEWS
Tue May 3, 2016 | 5:33 PM EDT
Healthy U.S. April auto sales fail to offset growth fears
4h ago | 01:07
Auto sales up, but for how long?
- GM.N) estimated the seasonally adjusted annualized selling rate will be 17.6 million vehicles. That was more than the 17.5 million vehicles expected by analysts polled by Reuters. U.S. auto sales in 2015 hit a record 17.4 million vehicles.
Wall Street analysts say the U.S. auto market is close to a cyclical peak and that more production cuts, which hurt profits, could be needed to keep inventories of vehicles from ballooning later in the year.
"We continue to believe sales growth will be muted this year," Joseph Spak of RBC Capital said in a note to investors.
Inventory data issued early on Tuesday, pointed to some possible "risk to North American production over the coming months," Spak added.
The sluggish pace of U.S. economic growth adds to concerns that the auto industry recovery could run out of fuel.
GM and Ford Motor Co (F.N) shares were down more than 1 percent generally in line with the broader market, while Fiat Chrysler Automobiles NV (FCHA.MI) (FCAU.N) fell more than 2 percent.
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GM and Ford Motor Co (F.N) said sales to individual consumers were still growing. But because GM has been cutting back on low-profit sales to rental car companies and other fleets, its overall April U.S. sales fell by 3.5 per cent.
GM's results were among many that highlighted a divide in the market between slumping sales of traditional sedans, and robust demand for pickup trucks and SUVs.
GM said sales of the Chevrolet Silverado pickup truck rose nearly 9 percent in April compared to a year earlier. However, sales of GM's Cadillac CTS and ATS luxury sedans plummeted 23 percent and 18 percent respectively.
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A Ford logo is pictured at a store of the automaker in...
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Vehicles are covered with protective wrap as workers p...
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The Fiat logo is pictured at a car dealership at Motor...
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A Ford logo is pictured at a store of the automaker in...
REUTERS/LEONHARD FOEGER+
Vehicles are covered with protective wrap as workers p...
REUTERS/REBECCA COOK/FILE PHOTO+
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Other luxury brands also had weak results in April, especially for cars. Toyota Motor Corp's (7203.T) Lexus luxury division suffered a 26 percent decline in sales of cars such as the large LS sedan, although sales of Lexus brand SUVs rose 20 percent.
German luxury car maker BMW AG (BMWG.DE) said sales of its BMW brand passenger cars fell 6.5 percent, while its SUV sales fell 9.7 percent.
The chief executives of two leading auto dealer groups, AutoNation Inc (AN.N) and Group 1 Automotive (GPI.N) had warned in April that automakers should start curbing production, particularly of slow-selling luxury sedans.
Still, April U.S. sales for Ford, Honda, and Nissan Motor Co (7201.T) all beat analysts' expectations. Ford's sales rose 4 percent from a year earlier, Fiat Chrysler Automobiles was up 5.6 percent and Toyota, No. 3 in the U.S. market, rose 3.8 percent. Honda Motor Co's (7267.T) sales rose 14.4 percent.
(Editing by Jeffrey Benkoe and Tom Brown
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