March sales fall 1.7%; seven-year sales streak appears over
The unprecedented seven-year sales streak the auto industry sustained from the end of the recession until the end of last year may finally be over. Sales fell 1.7 percent in March, despite analystsê forecasts of a 2.2 percent increase. The seasonally adjusted annual sales rate has dipped to 16.6 million, the lowest since February 2015. But analysts still forecast 17 million or more for 2017 sales (see previous article), which industry observers agree is robust.
The economy is strong, said Kurt McNeil, U.S. vice president of sales operations. More people are working, consumer confidence is at a 16-year high, fuel prices are low.
Because consumers continue to leave cars for SUVs and light trucks, transaction prices are higher, with the average now $34,342, up 1.7 percent from a year earlier, said Kelley Blue Book.
Vehicle inventories at dealerships, especially cars, were the highest they have been since 2004, according to Edmunds.com. Manufacturers are offering heavier incentives on cars just to move them off the lot. The average per-vehicle incentive of $3,768 looked ready to set a record, said J.D. Power and LMC Automotive.
Only 39 percent of U.S. new-vehicle sales in March were cars. Washington area consumers have traditionally favored cars, but the most recent Area Annual Sales Report showed that cars were just 42.8 percent of 2016 sales.Download Bulletin PDF