Published On: Wed, May 2nd, 2018

No Spring Bounce for U.S. Auto Sales

Following a long period of boom for auto makers, the recent rollercoaster ride in auto sales continued, after major auto makers reported lower new vehicle sales in April on continued weakened consumer demand.

Detroit giant Ford saw a 4.7-percent fall in sales, as retail sales to declined 2.6 percent. The second largest U.S. automaker reported that sales of its popular pickup trucks rose 0.9 percent, but passenger car and SUV sales dropped 15 percent and 4.6 percent respectively.

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Fiat Chrysler reported a sales increase of 5 percent overall last month. However, retail sales declined 1 percent. Sales of fleet vehicles to government agencies and rental car companies increased 5 percent, but these offer a lower margin.

The largest of the U.S. car manufacturers, General motors, no longer reports monthly sales as of last month. Ford will instead publish auto sales quarterly. However, industry analysts have been estimating that the company posted a monthly fall in April of anything up to 8 percent.

With Tesla due to announce its financial results for the first quarter on Wednesday, auto sales across America are expected to decline even further this year. As well as increased competition, hurting vehicle sales at retail levels are higher interest rates pushing up monthly car payments and squeezing consumer spending in general.

The declines in car sales stretched beyond the Detroit car manufacturers. Also suffering heavy declines in sales in April were Japanese car manufacturers.

Nissan Motor Co Ltd’s sales plummeted 28 percent in April. Passenger car sales plunged almost 35 percent, whilst truck SUV sales fell 23.1 percent. Even the Japanese auto maker’s popular SUV crossover model Rogue suffered a 45% collapse in sales in April. Nissan said in a statement; “April was an extremely challenging month with intense competition in the U.S. market.”  

Toyota Motor Corp reported a decline of 4.7 percent in its April sales. There was a 1.5 percent increase in sales of its pickup truck and SUV sales, but this only offset a little the heavy 12.7 percent decline in passenger car sales. The recently revamped Camry sedan which has been at the centre of Toyotas plans for 2018 fell 5 percent last month

Another Japanese car manufacturer reporting a bad April was Honda Motor Co Ltd. The car giant reported that sales dropped 9.2 percent in April. Passenger car sales fell 14.4 percent whilst SUVs and pickup trucks fell 3.9 percent. Honda’s recently revamped Accord sedan, their flagship vehicle, saw sales plummet 19.3 percent in April.

The trend in falling car sales is expected to continue in 2018, as the cost of raised interest rates are expected to hit consumer spending. Meanwhile, high profile car recalls are not doing the car industry any favours.

Author: Jacob Maslow

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