As automakers’ April sales fall, Wall Steet worries the boom is over

As automakers’ April sales fall, Wall Steet worries the boom is over

0 comments 📅03 May 2017, 00:15

DETROIT – Main automakers on Tuesday posted declines in U.S. new vehicle sales for April in a fresh indicator the long boom cycle that lifted the American auto industry to report sales last year is losing steam, sending carmaker stocks down.

The dash in sales versus April 2016 came on the heels of a disappointing March, which automakers had shrugged off as well-founde a bad month. But the two straight weak months is heightening Wall Street worries the cyclical effort is on a downward swing after a nearly uninterrupted boom since 2010 in the wake of the Enormous Recession.

General Motors shares were down 3.2 percent while Ford slid 4.1 percent, and Fiat Chrysler Automobiles NV’s U.S.-traded shares tumbled 4.4 percent.

The U.S. auto activity is facing multiple challenges. Sales are slipping, and vehicle inventory levels be struck by risen even as automakers have hiked discounts to lure customers. A inundation of used vehicles from the boom cycle are increasingly competing with new cars.

The subject for automakers: How much and for how long to curtail production this summer, which purposefulness result in worker layoffs?

Results by automaker:

GENERAL MOTORS: No. 1 U.S. automaker GM reported a 6 percent slant downwards in April sales to 244,406 vehicles, but crossovers and trucks continued to see strong development.

FORD: Sales at the No. 2 U.S. automaker, fell 7.2 percent in April, while Toyota recorded a decline of 4.4 percent and FCA sales were off 7 percent.

Ford car sales dropped 21 percent and trucks declined 4.2 percent, while SUV sales rose 1.2 percent.

TOYOTA: The indulgence Lexus brand posted an 11.1 percent slide. Overall, U.S. car sales at the Japanese automaker were down 10.4 percent, while social relations sales were up 2.1 percent.

NISSAN: April U.S. sales were off 1.5 percent, but SUVs, crossovers and trucks jumped 11 percent.

HONDA: The circle reported a 7 percent decline in sales in April, with cars off 7.4 percent and trucks up well-founde 0.8 percent.

“Inventory buildup is a top concern of automakers and all eyes are on whether cuts in o are enough to offset expected dips in sales,” Jessica Caldwell, executive chairman of industry analysis at consultant and car shopping website Edmunds.

Over the past match up of years, U.S. consumers have increasingly shunned cars in favor of larger crossovers, SUVs and trucks. While automakers posted upright declines for car sales in April, SUVs, crossovers and trucks were either up or off degree.

New vehicle sales hit a record 17.55 million units in 2016. But as the consumer desire for new cars has waned, automakers have leaned more heavily on discounts. Analysts put the seasonally adjusted annualized grade of sales for April at around 17 million units.

GM said its consumer discounts were equal to 11.7 percent of the transaction price. The automaker also said its inventory unchanging rose to 100 days of supply at the end of April versus around 70 days at the end of 2016.

Current levels have worried analysts, and GM has promised inventories will be down by the end of 2017.On a bull session call Mark LaNeve, Ford’s vice president for U.S. marketing, sales and c, insisted the industry was “relatively constrained” in offering discounts in April.

By Nick Carey

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