DETROIT (Reuters) – Major automakers on Tuesday posted declines in US new vehicle sales for April in a fresh sign the long boom cycle that lifted the American auto industry to record sales last year is losing steam, sending carmaker stocks down.
The drop in sales versus April 2016 came on the heels of a disappointing March, which automakers had shrugged off as just a bad month. But the two straight weak months are heightening Wall Street worries the cyclical industry is on a downward swing after a boom that has gone nearly uninterrupted since 2010 in the wake of the Great Recession.
General Motors shares were down 3.2 percent, while Ford slid 4 percent and Fiat Chrysler Automobiles NV’s US-traded stock tumbled 5.1 percent.
No. 1 US automaker GM reported a 6 percent decline in April sales to 244,406 vehicles, but crossovers and trucks continued to see strong growth.
Sales at Ford, the No. 2 US automaker, fell 7.2 percent in April, while Toyota recorded a drop of 4.4 percent and FCA sales were off 7 percent.
Over the past couple of years, US consumers have increasingly shunned cars in favor of larger crossovers, SUVs and trucks. While automakers posted steep declines for car sales in April, SUVs, crossovers and trucks were either up or off slightly.
New vehicle sales have risen ever since the end of the Great Recession, hitting a record of 17.55 million units in 2016. But as the consumer appetite for new cars has waned, automakers relied on discounts to push vehicles to potential buyers.
GM said its consumer discounts were equivalent to 11.7 percent of the transaction price. The automaker also said its inventory level rose to 100 days of supply at the end of April versus around 70 days at the end of 2016.
Recent levels have worried analysts, and GM has promised inventories will be down by the end of 2017.
On a conference call, Mark LaNeve, Ford’s vice president for US marketing, sales, and service, said the industry was “relatively constrained” in offering discounts in April.
“We were very constrained and disciplined, so I think nobody was trying to force the industry other than some spot incentives that you see and hear in some of our competitor’s specific products,” he said.
Ford car sales dropped 21 percent, and trucks declined 4.2 percent, while SUV sales rose 1.2 percent.
Toyota’s luxury Lexus brand posted an 11.1 percent slide. U.S. car sales at the Japanese automaker were down 10.4 percent, while truck sales were up 2.1 percent.
Nissan said April US sales were off 1.5 percent, but SUVs, crossovers and trucks jumped 11 percent.
By Nick Carey
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