--
 
SA's best-selling cars

Continuing its trend as South Africa’s best-selling passenger car, Volkswagen has sold more than 2300 Polo Vivos in March 2017.

How Porsche will help local youths in SA

Porsche SA has opened its new Training Centre in Cape Town which aims to provide opportunities for 75 youths from disadvantaged backgrounds in the auto industry.

Ford, Nissan, GM, Toyota report April US sales declines

2017-05-03 08:44
undefined

DROP IN SALES: Many automakers, experienced a drop in US vehicle sales. Image: AFP

Detroit - Ford, Nissan, General Motors and Toyota all reported U.S. sales declines in April, strong signs that demand for cars, trucks and SUVs is starting to slow after seven straight years of growth.

Ford's sales fell 7.2%, dragged down by car sales that tumbled over 21%. At Nissan, sales dropped 1.5% as SUV demand couldn't overcome slowing car sales. Sales of the Rogue small SUV were up almost 40% but car sales fell nearly 14%. It was about the same story at General Motors, where sales were down 5.8% as strong performances from some SUVs and the Cruze compact car couldn't offset falling pick-up truck demand.

Toyota reported a 2% sales decline for the month as healthy sales of the RAV4 small SUV were overcome by falling demand for cars such as the Camry and Corolla.

Compete for a piece of a shrinking pie

Industry analysts expect April sales to be down anywhere from 2% to 4%, but still run at a healthy annual rate of around 17.1-million vehicles. Most major automakers report sales figures on Tuesday.

Kelley Blue Book says it looks like 2017 US sales will fall short of last year's record 17.5-million for the first annual sales drop since 2009.

While sales still are healthy, automakers are offering deals to compete for a piece of the shrinking pie. But there are signs that the industry is relying too heavily on incentives.

The average price paid per vehicle is starting to wane after years of steady increases, even for popular SUVs. Previously SUV prices kept growing while car prices fell due to sagging demand.

The average price paid for an SUV in April was $33 165, according to the consulting firm JD Power and Associates. That was down 2 percent from last April. One reason for the decline was that more customers were buying smaller, less expensive SUVs this year. But another was a whopping 18 percent increase in incentives, which hit $3338 per vehicle.

'Unhealthy habits'

As automakers released sales data Tuesday, company shares came under heavy pressure. The industry was one of the worst performing on the S&P 500 and Ford shares neared a 2-year low.

Jeff Schuster, a senior vice president at the forecasting firm LMC Automotive, said automakers are fiercely competing so they don't lose sales in the hot SUV market. But that can lead to inflated demand, overproduction and ever-higher incentives.

"This will have to balance with natural demand at some point relatively soon or the industry will be heading into potential troubled waters and unhealthy habits," he said.

Before the 2008 financial crisis, automakers were relying on incentives to boost sales and preserve market share, to the point that they were losing money on some models.

Last month, incentive spending was up 11 percent on cars, to $3,903 per vehicle. The average price paid for a car was $25,516, which was about the same as last year.

Pickup trucks were the only segment in which automakers offered fewer deals. Incentive spending was down 6 percent to $3,276 per vehicle. Customers were willing to pay $31,438 for a pickup in April, which was 1 percent more than a year ago.

NEXT ON WHEELS24X
Read more on:    toyota  |  ford  |  general motors  |  nissan  |  usa  |  auto industry  |  car sales

Inside Wheels24

SA's best-selling cars: Polo Vivo tops sales in April 2017

The Volkswagen Polo Vivo held onto its position as South Africa's best-selling passenger car despite a huge drop in overall new vehicle sales during April 2017, reports Naamsa.

There are new stories on the homepage. Click here to see them.