Email
Password
Remember meForgot password?
    Log in with Twitter

article imageU.S. automakers post sale declines in April, ending boom cycle

By Karen Graham     May 2, 2017 in Business
With the Detroit Three automakers posting poor new car sales in April, following a dismal March, it may be further evidence that the boom cycle that lifted the auto industry last year is finally over.
U.S. automakers have experienced an almost uninterrupted boom in new car sales since 2010 and the end of the Great Recession. But two weak sales months in a row is something Wall Street is looking at very closely. Automakers scoffed at the March sales report, maybe thinking it was nothing more than a fluke, but April sales tell a different story, reports Reuters.
As it stands, General Motors shares on Wall Street were down 3.2 percent while Ford Motor Company slid 4 percent and Fiat Chrysler Automobiles NV took a nose-dive, dropping 5.1 percent. The Detroit automakers blame the dismal April 2017 showing on having one less selling day that in April 2016.
File photo of a car dealership.
File photo of a car dealership.
Christopher Ziemnowicz
U.S. Sales - By the numbers
General Motors sales totaled 244,506 units last month, down 5.8 percent from the same month in 2016. Ford Motors sold 244,506 vehicles in April, a drop of 7.2 percent from the previous April in 2016. Fiat Chrysler Automobiles NV said April sales fell 6.6 percent to 177,441 vehicles.
The only gain in anything was posted by Ford Motors, according to Detroit News, who said SUV sales increased by 1.2 percent in April with 73,318 SUVs being sold. But Ford's car sales dropped 21.1 percent, continuing a trend seen by all the automakers. Surprisingly, Ford also saw a drop in truck sales of 4.2 percent, reversing a first-quarter increase in sales.
"After a weaker-than-expected March, it’s becoming more likely that 2017 will be the first down year for the industry since 2009,” Tim Fleming, an analyst for Kelley Blue Book, said in a statement.
“Beyond April, we will continue to closely monitor still high levels of inventory and elevated incentive spending by manufacturers, both of which are signs of overproduction following last year’s sales peak.”
Automaker assembly line
An employee works on an assembly line inside a Ford plant.
Photo courtesy Ford Motor Company
Global auto sales not much better for S. Korean automakers
South Korean automakers posted double-digit drops in new car sales in April, according to China's Xinhua. Hyundai Motor and its affiliate Kia Motors posted 364,225 units and 209,832 units respectively in global auto sales in April, down 11.7 percent and 13.2 percent from 2016.
China is the world's largest automotive market, however, weak demand in China for new automobiles was attributed to the drop in sales. Figures for March 2017 show that Hyundai and Kia new car sales plummeted 52.2 percent in China on a yearly basis. General Motors Korea posted a drop of 2.8 percent in global sales, while Ssangyong Motor sales dropped 17.8 percent.
Overall, May sales figures will be worth watching, not just domestically, but on the global market. The stock market is concerned, and as long as inventories are still up, there won't be much of a change in the present downward spiral in earnings.
More about US automakers, drop in sales, south korean automakers, global drop in sales, Stock market
 
Latest News
Top News