Each month automotive industry experts from Cox Automotive and its brands host a sales day commentary call to provide insights into the previous month and to answer media questions related to market movement. The audio for the most recent call which covers the March selling month is available.
Below is written commentary from our industry experts covering a range of topics including sales volume, OEM and segment performance, shopping trends and incentives.
Automakers reported stronger-than-expected March 2018 U.S. sales today.
From Michelle Krebs, Executive Analyst for Autotrader:
General Motors and Fiat Chrysler blew forecasts out of the water. GM sales were up 16 percent, more than double what even the optimists had projected. Fleet sales edged up and incentives were plentiful, but GM’s strength came from its new vehicles, notably crossovers and sport utilities. At Fiat Chrysler, it’s all about Jeep, where rising sales helped lift all of Fiat Chrysler. The Chrysler Pacifica had an exceptional month, adding icing to the cake. Ford results were less surprising, with the brand performing as expected. Trucks and SUVs, particularly the new Lincoln Navigator, pushed overall Ford sales to the positive.
From Rebecca Lindland, Executive Analyst for Kelley Blue Book:
March proved to be a lion for the domestic automakers, with double- and even triple-digit sales increases posted for redesigned SUVs like the Lincoln Navigator, Jeep Compass, and GMC Terrain, proving today’s buyers want fresh, new, products. It’s a great time to buy a vehicle, especially before interest rates increase even more.
(On GM) It’s great to see all four of GM’s brands with double-digit sales increases, although fleet played a role in those results. The Buick story demonstrates a winning combination of products and appealing marketing can revitalize a brand.
(On Ford) Ford had a good month, with a slight increase in retail sales bolstered by sales to fleet. The most impressive part of Ford’s story is its average transaction price of $36,300, which shows consumers are willing to pay for premium content.
(On FCA) Great to see FCA finish the quarter in the black, up 1 percent for the year including a 14 percent increase in March. Jeep finally seems to be putting its portfolio woes behind with strong sales of its all-new Wrangler, Compass and Cherokee.
From Akshay Anand, Executive Analyst for Kelley Blue Book:
While Honda had a good March, there will no doubt be concern with the Accord’s continued dip in sales. Coming off the heels of an incredibly hot Civic redesign, expectations were high for Accord sales. So far, the Civic and CR-V continue to outpace it handily. On the plus side, there’s time to right the Accord ship and other models continue to perform very well for the brand.
Nissan had a lackluster March, primarily due to its car segments. Though the company continues to fleet and incentivize highly, there will be monthly swings due to these two spigots. With the Altima redesign due to hit the market soon, Nissan should hope that will stem some of the retail sedan bleeding.
Toyota had an upbeat March, paced by a few key truck and SUV models. The Tacoma and Tundra were both up significantly year over year, a sign that the environment continues to be ripe for pickups. Camry growth was relatively flat, though flat sometimes isn’t a bad thing for sedans in today’s automotive market.
From Karl Brauer, Executive Publisher for Autotrader and Kelley Blue Book:
Sales numbers look solid, both for March and Q1, but there’s no denying the impact of fleet sales for many brands, including Nissan, Toyota and all three domestics. It might be cynical to suggest fleet sales were leveraged to bring Q1 in line with 2017’s Q1 for many brands, but it also might be completely accurate. Transaction prices remain high due to the ever-growing sales of trucks and SUVs versus the ever-shrinking sales of cars. Overall the economy and consumer confidence remain strong, suggesting new vehicles sales, both retail and fleet, will continue at a healthy clip for 2018.
From Charlie Chesbrough, Senior Economist for Cox Automotive:
Sales in the first quarter of 2018 have held up well, despite stock market volatility and coastal nor’easters. The impact of tax reform may now be kicking in and lifting the market above previous expectations. March sales numbers are coming in strong and there’s little to point to as a contributing factors other than tax reform, and the fact that many taxpayers are now withholding less money. Interest rates, which have been rising with recent Federal Reserve policy tightening, have lifted auto loan rates to levels not seen since 2013 but do not appear to be derailing automotive sales. Our expectation is that more interest rate increases will occur in 2018 and the resulting higher monthly payments will, eventually, slow the current pace.
From Zohaib Rahim, Research Manager for Cox Automotive:
Many OEMs decided to “spring into fleet sales” last month. Though FCA and Ford are down in fleet for the year, their fleet sales increased 22 percent and 9 percent respectively for March versus last year. GM has increased fleet sales as well, with a 23 percent bump in fleet sales last month versus March 2017. Toyota has seen strong sales reporting in Q1 2018 and some of that strength can be attributed to fleet sales; fleet sales for the first two months of 2018 were up 45 percent versus last year, driven largely by rental sales. Nissan followed suit, with a 31 percent increase for the first two months of the year led by rental fleet, though the brand could be slowing its fleet push. Overall, it looks like the market is continuing the pace set in February: Fleet sales in March should be up overall for the month and the quarter.
From Brad Korner, general manager for Cox Automotive Rates and Incentives:
The OEMS had a prescriptive approach for incentives in March, suggesting most are comfortable with 2017MY sell down, overall inventory levels and sales pace. There were few big, unpredictable moves, and we expect most programs to carry through April tax-return selling season. Fresh and new SUVs and CUVs are selling/leasing with low incentives and higher transaction prices. Major players, however, continue to spend money to defend pickup truck turf, consistent with the first quarter. And FCA continues to fund multiple incentive programs to help buyers with FICA scores below 620. As interest rates rise, those programs will likely become more expensive to support.