Trucks lift slowing U.S. auto sales

Ford’s F-Series, GM’s Chevy Silverado surge in December

Chevrolet Silverados sit on display at a dealership in Manchester, N.H., in April. Auto sales in December ended the year on a bright note, but analysts think sales will fall a bit further this year.
Chevrolet Silverados sit on display at a dealership in Manchester, N.H., in April. Auto sales in December ended the year on a bright note, but analysts think sales will fall a bit further this year.

Carmakers capped their first year of shrinking U.S. sales since the recession on a high note, with surging truck demand buoying General Motors Co. and carrying Ford Motor Co. to a surprise gain.

Ford's light-vehicle deliveries rose 1.3 percent last month as its F-Series pickup line had its best year since 2005. GM reported a less dramatic monthly drop than analysts expected, as sales of the Chevrolet Silverado climbed 25 percent.

"This year, it'll be an even bigger year for trucks, because there are new ones coming," said Michelle Krebs, an analyst with car-shopping website Autotrader. "We know that Fiat Chrysler will be introducing a new Ram this year. General Motors has a couple of new full-size pickup trucks and Ford will have some additions to the F-Series. So, it's going to be the year of the truck."

Fiat Chrysler Automobiles NV, which reported deliveries that were in line with analyst estimates, climbed as much as 3.1 percent in New York trading, while GM jumped as much as 2.8 percent.

GM predicted the industry would post an annualized selling rate for December, adjusted for seasonal trends, of 18.2 million light vehicles, matching the pace set a year earlier and beating the average estimate of analysts surveyed by Bloomberg News.

"I'm actually surprised the industry was as strong as it was; we had some pretty severe weather, bitterly cold in much of the country," Mark LaNeve, Ford's U.S. sales chief, said on a call with analysts and reporters. "That typically isn't great for vehicle shopping, but the industry ran really strong in the last 10 days" of the month.

Ford's F-Series was the top pickup in the U.S. for the 41st-consecutive year and extended to 36 years its annual reign as the best-seller among all vehicles. Toyota Motor Corp.'s RAV4 was the leading sport utility vehicle for the first time and joined Nissan Motor Co.'s Rogue crossover in outselling all passenger cars in what was a bleak year for sedans.

Fiat Chrysler reported an 11 percent decline for the month. While the automaker's U.S. sales have dropped each of the past 16 months, it's been curbing discounted shipments to rental-car companies and other fleet buyers. Deliveries to those customers plunged 42 percent in December.

Toyota posted an 8.3 percent decrease in December sales, in line with analyst estimates, while Nissan Motor Co., with a 9.5 percent decline, and Honda Motor Co., falling 7 percent, trailed projections.

Industry sales in 2018 probably will drop again thanks in part to higher interest rates and greater availability of used sport utility vehicles. The average analyst estimate is for 16.7 million light-vehicle sales in 2018, which is still a healthy level by historical standards.

Light trucks, which include pickups and SUVs, gained share last year, accounting for 63 percent of U.S. sales through November, up from 59 percent a year earlier, according to researcher Autodata Corp. Consumers like the extra storage space, higher seating position and improved fuel economy of car-based SUVs, also called crossovers.

Analysts think sales will fall a bit further this year. While low unemployment and rising consumer confidence are expected to boost demand, rising interest rates could make it more expensive for people to finance new vehicles.

"That's real money to consumers," said Charlie Chesbrough, a senior economist with Cox Automotive, which owns AutoTrader.com and other car-buying sites.

Vehicles also are becoming more durable so many consumers aren't buying new ones, which further puts a drag on sales. The average age of vehicles on the road has climbed to 11.6 years, up from 8.8 years in 1998.

The growing popularity of leasing will have a big impact on 2018 sales. Almost one-third of new-vehicle sales were leases in 2015, and many of those 4 million lessees will be trading in their vehicles for new ones, according to the car-buying site Edmunds.com.

Information for this article was contributed by The Associated Press.

Business on 01/04/2018

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