U.S. Auto Sales to Post First Drop In Seven Months On Gas Costs
U.S. automobile sales probably fell for the first time in seven months in March as the crisis in Japan and the highest gas prices in more than two years hurt consumers’ confidence.
March light-vehicle deliveries, to be released tomorrow, may have run at a 12.9 million annual rate, the average estimate of nine analysts surveyed by Bloomberg. While higher than a year ago, it’s less than the seasonally adjusted rate of 13.4 million in February, according to Autodata Corp.
The conflict in Libya helped push gas prices to the highest since September 2008, slowing truck and sport-utility vehicle sales. Confidence among U.S. consumers fell more than forecast to a three-month low this month, the Conference Board said March 29. The group said 3.6 percent of Americans plan to buy a new auto in the next six months, down from 3.9 percent in February.
“A lot of uncertainty in the geopolitical environment, with the crisis in Japan and Middle East unrest, affects consumers’ tendency to make big-ticket item purchases,” said Jesse Toprak, vice president of industry trends at TrueCar.com in Santa Monica, California. “There’s hesitancy by consumers to pull the trigger on car purchases.”
A 12.9 million rate this month would be an increase from the 11.7 million pace in March 2010, and all major automakers except Toyota Motor Corp. may report gains in deliveries from a year earlier, according to analysts’ estimates compiled by Bloomberg.
Light-vehicle sales in 2010 rose to 11.6 million from a 27- year low in 2009. Deliveries still were 31 percent fewer than the 16.8 million annual average from 2000 to 2007, according to Woodcliff Lake, New Jersey-based Autodata.
Deliveries at Toyota may have slipped 3.6 percent from a year earlier, the average of four analysts’ estimates, as the world’s largest automaker offered smaller discounts. Toyota City, Japan-based Toyota boosted sales incentives 46 percent in March 2010 after it began record recalls earlier that year.
Sales may have gained 24 percent at Honda Motor Co., and Nissan Motor Co. deliveries may have increased 16 percent, the average of four analysts’ estimates.
Global automakers may lose production of 585,000 vehicles this month after the March 11 Japan earthquake and tsunami damaged factories of manufacturers and their suppliers, according to researcher IHS Automotive.
Toyota said last week it has lost output of more than 140,000 vehicles. Honda, based in Tokyo, said it had lost 46,600 vehicles, while Yokohama, Japan-based Nissan said it lost 42,000 units of production from March 14 to March 27.
GM, which closed its Shreveport Assembly plant in Louisiana the week of March 21 because of a Japan-related parts shortage, may report a 20 percent gain in March deliveries, the average of five analysts’ estimates.
Ford Motor Co. may report a 13 percent increase for March, the average of five estimates. Ford’s increased sales of small cars such as the Fiesta and Focus may help the second-largest U.S. automaker outsell GM, which offered smaller discounts during the month, said Jessica Caldwell, an analyst at industry researcher Edmunds.com.
“The GM and Ford race will be really tight,” said Caldwell, who’s based in Santa Monica, California. “GM came out really strong in the beginning of the year with incentives. When you do that, you’re going to pull ahead sales from later months.”
Automakers may cut incentives and sales to fleet customers to conserve inventories as parts shortages threaten the loss of as much as 100,000 units of production in North America in the near term, said Jeff Schuster, an analyst at J.D. Power & Associates in Troy, Michigan.
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