Ford Joins Fiat Chrysler With Slow Start to the Year

• February 01 2018
• Jamie Butters, Keith Naughton

Most major automakers posted sluggish U.S. sales to start the year, as demand dropped for Ford Motor Co. SUVs, Fiat Chrysler Automobiles NV pickups and General Motors Co. cars.

Most major automakers posted sluggish U.S. sales to start the year, as demand dropped for Ford Motor Co. SUVs, Fiat Chrysler Automobiles NV pickups and General Motors Co. cars.

The three U.S. automakers missed analyst estimates, while Toyota Motor Corp. posted a bigger January jump than expected in a Bloomberg News survey. Sales dropped for Fiat Chrysler’s Ram truck line and Ford’s sport utility vehicles, including the Escape. GM’s deliveries of Chevrolet Cruze and Impala sedans fell by more than 45 percent.

“It’s typical to see a slowdown at dealerships in January following the high-selling holiday months,” said Jessica Caldwell, executive director of industry analysis at Edmunds. “This isn’t necessarily a solid indicator of the direction that the year is headed in terms of overall sales.”

Most major carmakers were projected to report small increases for January following the first year of shrinking U.S. auto demand since the recession. The monthly annualized sales pace probably slowed to 17.1 million cars and light trucks. That rate, which is adjusted for seasonal trends, accounts for dealers having one more selling day on the calendar than a year earlier.

GM projected an industry sales rate of 17.4 million light vehicles. That would match last year’s pace.

The auto market has been benefiting from stable fuel prices, available credit and low unemployment. The tax bill signed by President Donald Trump probably will support demand in 2018, though most carmakers and analysts still project that annual industry sales will decline for a second consecutive year. GM expects tax cuts will boost economic growth and be a tailwind for the industry, Chief Financial Officer Chuck Stevens said last month.

Sales of light trucks, which include SUVs, probably will jump about 5 percent this month while passenger car deliveries drop by 3 percent, Goldman Sachs analysts estimated in a report last week.

“We expect strong mix to at the very least hold in for 2018, and more likely to further improve,” Brian Johnson, a Barclays analyst, wrote in a report to clients Monday. This will keep boosting average selling prices and automakers’ profit margins, he said.

— With assistance by David Welch, and John Lippert