The top five automakers in the United States on Tuesday reported higher March sales, beating forecasts and raising expectations April could show an even stronger sales rebound after a long winter.
Sales rose 5.7 percent in March to an annualized selling rate of 16.4 million vehicles, well beyond the expectations of 40 analysts polled by Thomson Reuters. They on average expected a 2 percent increase for an annualized selling rate of 15.8 million vehicles.
Cold weather and snow kept many consumers away from dealer show-rooms in early March. But the second half of the month showed promise that April will be a strong sales month, said sales executives from Ford and Toyota.
Ford Vice President of U.S. Sales John Felice said the sales momentum in late March shows "the trend positive heading into April."
Bill Fay, general manager for Toyota brand U.S. sales, said, "We're optimistic that momentum will spring us in into April."
General Motors Co.’s U.S. sales rose 4 percent, Ford Motor Co reported a 3 percent rise in U.S. sales, Toyota Motor Corp. a 5 percent rise and Chrysler Group, a unit of Fiat Chrysler Automobiles, a 13 percent increase from a year ago.
All beat expectations by industry research firm Edmunds.com.
No. 5 in the U.S. market for March, Nissan Motor Co., also came in ahead of estimates, selling 149,136 vehicles in the month, up 8 percent.
GM's 4 percent sales gain beat estimates of a 0.5 percent rise. But most of the attention on GM on Tuesday was focused on Chief Executive Mary Barra's appearance at a congressional hearing on the company's slow response to defective ignition switches, blamed for at least 13 deaths.
Alec Gutierrez, analyst with industry research firm Kelley Blue Book, said it was too early to tell if GM's recall crisis has hurt its sales, but said that it is possible that buyers may stray to other automakers soon.
"I wouldn't be surprised to see some conquest activity maybe in April or May," said Gutierrez.
GM shares closed down 0.2 percent at $34.34, after trading higher earlier in the day. Ford shares added 4.6 percent to $16.32. The wider S&P 500 index was up 0.7 percent.
BOOST FROM INCENTIVES
Auto sales are an early indicator of U.S. consumer demand for big-ticket items that comes right at the start of a new month, before government reports on retail sales and durable goods.
The economy sagged in the first two months of year, as did auto sales, amid massive snowstorms over much of the United States. But there were signs of a pickup since then.
The boost in sales may be linked to higher incentives by automakers in March, said Larry Dominique, executive vice president at industry researcher TrueCar. He said incentives rose 8 percent to an average $2,800 per new vehicle sale.
Automakers and dealers offer incentives, ranging from discounts to low interest rates, to entice consumers to buy.
Honda Motor Co. showed a decline in U.S. March sales of 2 percent, to 133,318 vehicles.
Although Honda's sales fell, many analysts had forecast a deeper drop, including Edmunds, which saw a 10 percent decrease.
GM's full-size pickups Chevrolet Silverado and GMC Sierra saw sales of 53,378, up 11 percent. Its Buick brand sales rose 13 percent and its Cadillac brand fell 6 percent.
Ford said its F-Series pickup truck sales rose 5 percent to about 71,000 in March and its Fusion sedan sales rose 9 percent to nearly 33,000. Ford's luxury brand, Lincoln, increased sales 31 percent, led by a 72 percent sales jump for its best-selling vehicle, the MKZ sedan.
Toyota's top-selling sedan, the Camry, increased sales 11 percent to 41,953 in the month, and Toyota's eight crossovers and SUVs increased sales 19 percent. Sales of Toyota's smaller cars fell, including a drop of 16 percent for its hybrid Prius, 5.5 percent for Corolla and 24 percent for the Yaris subcompact.
Chrysler relied on hefty sales of its Ram trucks and Jeep Cherokee SUV, which both showed 26 percent sales jumps from a year ago.
Hyundai Motor Co.’s U.S. sales fell 2 percent in March to 67,005 vehicles. Its sister company Kia Motors Corp. increased U.S. sales 11.5 percent to 54,777 vehicles.
BMW said its March sales rose 8 percent to 35,762 vehicles, despite a drop of 40 percent for its MINI brand. The BMW brand had a 19 percent sales rise to 32,107 vehicles.
Subaru, a division of Fuji Heavy Industries, said its March sales rose 21 percent to 36,701, led by a 53 percent rise for its best-selling vehicle in the U.S. market, the Forester crossover vehicle.
Volkswagen AG's U.S. auto sales fell 3 percent to 36,717 vehicles in March. Sales of its best-selling cars, the Jetta and the Passat, rose 5 percent and 16 percent, respectively.
Mazda Motor Corp. March sales rose 9 percent to 34,903 vehicles, the company's best March U.S. sales since 2007.
Mitsubishi Motors Corp. had its best sales month since August 2008 as U.S. sales rose 70 percent to 8,996 vehicles.
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