Manufacturing News from the Engineered Designer Perspective

Auto Sales Down Again for Big Car Makers

Demand is down again for automobiles in April, after an already weak March 2017. Overall, in April, numbers were down 5% for April 2017 versus April 2016.[1]

 

Toyota already has 2018’s on their website.

 

Demand overall is down, with the big automakers suffering the most (April 2017 over April 2016):

  • Ford down —7.4%
  • General Motors down —5.8%
  • Dodge down —2.6%
  • Toyota down —2.7%
  • Honda down —7%

In March, according to Motor Intelligence, passenger cars were down 11.5%, although trucks were up, netting light vehicle sales down 1.5%. [March 2017 numbers as chart below.][2] This marks the fourth monthly drop.

US Auto Market Sales March 2017.

 

For Aprill, analysts had expected a drop of 4%. Demand for light trucks and SUVs remained better, but not sufficient to offset the drop in car numbers. Volkswagen is the only major brand to beat the overall declines, with a modest 1.6% increase, following on the heels of 5 previous months of gains. The VW-Audi brand is forecast to drop 0.4% however.

 

Despite a drop in sales, GM overall reported increased net income.

 

Within carmakers, individual brands fared differently. At Ford, the main Ford brand dropped —7.4% while the luxury Lincoln brand was only down marginally at —0.9%. Toyota flips that around, with Lexus, their luxury mark, down —11% while the main Toyota brand is down —3.5%

90-Day Inventory and Discounts

Although car companies shoot for 60 days or less inventory, the big car companies roll into April with 90-Day inventories on average. Spring is normally a “hot” time for car sales, but the manufacturers are coping with remaining 2016 stock. This should be positive for consumers looking for deals — discounts or zero-percent financing.

 

Ford’s car lineup 2017.

 

April shows that incentive spending per average vehicle was $3814 in April, which is a negative trend, up nearly $500 from last year in April. This represents above 10% of price as incentive spending, versus the more typical 7.5%-9% ranges. Declining demand and overstocked inventory should see more discounts in spring 2017.

 

Honda car lineup 2017.

 

 

NOTES:

[1] Calculated by Automotive News based on reports from manufacturers (Source Automotive News Data Centre).

[2] Reported by Motor Intelligence

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