Sales Drop at Ford, GM, FCA In April

DETROIT, MI — After a weak March, auto sales continued to fall for Detroit’s automakers in April. Ford sales dropped 7.2 percent, Fiat-Chrysler 7 percent and General Motors dipped 5.8 percent. The numbers reflect month-over-month sales compared to April 2016.

While sales are down, the industry as a whole is still expecting about 17 million units to be moved this year. A record 17.55 million autos were sold in 2016. High interest rates on car loans is one reason why sales have soften, according to an industry expert.

New vehicle interest rates rose above 5 percent for the second month in a row. It’s something has not happened since early 2010, Jessica Caldwell, executive director of industry analysis for car-shopping site Edmunds.com, told the Detroit Free Press.

"Low interest rates and longer loan terms have helped drive car sales growth over the past few years,” she said. “But with interest rates rising, car loans are becoming less enticing for consumers, which inevitably creates further drag on new vehicle sales."

Dearborn-based Ford Motor Company saw sales of its perpetual cash cow F-Series pickups drop by 0.2 percent from a year ago. Ford sold 214,695 vehicles, with SUV sales seeing the only segment increase at 1.2 percent. The company’s Lincoln luxury brand’s sales dipped .9 percent, with 9,691 vehicles sold, the Detroit News reported.

Ford car sales dropped 21.2 percent, continuing an industry-wide trend of rapidly declining car sales for the year, the newspaper reported. Mark LaNeve, Ford vice president of U.S. marketing, sales and service, said in a statement that truck sales still drove up Ford’s average transaction pricing.

“Strong demand for high-series Super Duty trucks and diesel powertrains drove a $1,900 increase in Ford’s transaction pricing versus an industry increase of just $210,” he said in a news release. “F-150 customers equipped nearly 70 percent of their trucks with EcoBoost engines last month, with dealers seeing strong demand for our new Raptor.”

At GM, sales increased 17% for its Buick brand and 9.5% for Cadillac but that was not enough to overcome a 10.4% decline for its larger mainstream Chevrolet brand and a 0.3% decline for GMC, the Free Press reported. GM expects continued growth in crossovers.

“We see crossovers becoming an even bigger part of the industry and GM sales over the next five years,” Kurt McNeil, U.S. vice president of sales operations, said in a news release. “Just five years ago, about one in four GM sales were crossovers. Today, they account for almost one-third of our deliveries and we see more growth ahead.”

Despite a dramatic increase in its lower-volume Alfa Romeo brand, FCA saw sales decrease 27% for Chrysler, 13% for Jeep, 4% for Dodge and 13% for Fiat, the newspaper reported.

Declining sales aren’t just impacting Detroit automakers. Nissan North America Inc. and Toyota Motor North America also posted year-over-year April sales declines of 1.5 percent and 4.4 percent, respectively, the Detroit News reported.

“After a weaker-than-expected March, it’s becoming more likely that 2017 will be the first down year for the industry since 2009,” Tim Fleming, analyst for Kelley Blue Book, said in a news release. “Beyond April, we will continue to closely monitor still high levels of inventory and elevated incentive spending by manufacturers, both of which are signs of overproduction following last year’s sales peak.”

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