April 3, 2018
By Nick Carey
DETROIT (Reuters) – Detroit’s automakers posted sales gains in new vehicles in March on the back of a strong U.S. economy, sending shares in both General Motors Co <GM.N> and Fiat Chrysler Automobiles NV <FCHA.MI> <FCAU.N> up in early trading.
GM posted a 16 percent jump in new vehicle sales from the previous March, led by a 14 percent increase in higher-margin retail sales to consumers. Fiat Chrysler (FCA) reported a 14 percent increase in sales in March. FCA said it saw a 45 percent spike in sales of its popular Jeep models, giving the brand its best sales month on record.
The strong results for March followed a weak performance in February.
Last year, U.S. auto sales fell 2 percent after hitting a record high of 17.55 million units in 2016. Sales are expected to fall further in 2018 as interest rates rise and push up monthly car payments. Also, millions of nearly new vehicles will return to the market this year after coming off lease, providing a lower-cost alternative for consumers.
GM, the No. 1 U.S. automaker saw double-digit sales increases across all of its brands in March, with particularly strong gains for its SUV and pickup truck models.
“March was an exceptional month for us,” GM’s U.S. head of sales Kurt McNeil said in a statement. “A growing economy and strong new products helped us execute a very successful plan to conquest customers from other brands.”
GM also reduced its dealer inventory of unsold vehicles – a key metric for analysts – to 72 days from 85 days at the end of February.
But while GM said its average transaction price was up $900 in the first quarter, the company’s consumer discounts as a percentage of transaction prices hit 14.5 percent in March.
Industry analysts consider discounts of over 10 percent to be unhealthy as they undermine resale values.
FCA’s retail sales to consumers outstripped those of No. 2 U.S. automaker Ford Motor Co <F.N>.
But FCA also saw a 22 percent increase in lower-margin fleet sales to rental car companies and government agencies. Over the past year FCA has pursued a policy of cutting fleet sales.
Ford reported a 3.4 percent increase in overall sales for March, led by an 8.7 percent rise in fleet sales. Retail sales were up just 0.8 percent in the month.
Ford said sales of its best-selling F-Series pickup trucks were the best since 2000.
Toyota Motor Corp <7203.T> reported a 3.5 percent increase in sales in March, with double-digit increase in SUV and pickup truck sales offsetting a 6.1 percent decrease in sedan sales. Sales of the company’s completely-revamped flagship Camry sedan fell 1.1 percent.
In morning trading, GM shares were up 2.6 percent at $36.68, while FCA shares rose 5.2 percent to $21, and Ford shares were up 1.2 percent at $11.
(Reporting By Nick Carey; Editing by David Gregorio)