Automobile sales in the U.S. fell 2 percent in the first quarter, and yet another sign the nation’s economy is starting to slow.
Automakers sold more than 4 million vehicles from January through March, according to Ward’s Automotive Intelligence, and industry analysts blame competition from an abundant supply of automobiles, the reduction in vehicle prices and relatively substantial rates of interest. Weak sales of automobiles , harsh winter climate and also the government shutdown also had a direct impact.
“We can now confidently say new vehicle sales are past their peak,” said Jeremy Acevedo, Edmunds.com’s manager of industry analysis. “With new vehicle prices continuing to increase, interest rates sustaining post-recession drops and leasing becoming progressively costly, strain on the market is mounting”
Prices are a large factor. The National Automobile Dealers’ Association reported that the typical new car sales price was $36,410 in the end of the first quarter, up 3.3percent from one year ago. Auto-loan interest rates, on average, reach their highest point in a decade at 6.36%up from 5.66percent one year ago, according to Edmunds, which offers articles to The Associated Press.
The report of falling sales came a day after the Commerce Department reported that retail sales dropped 0.2percent in February as customers pulled back from paying building materials, markets, furniture, electronics and clothes.
The dip in consumer spending and automobile sales suggests their pockets are tightening amid waning consequences of 2017 in the end of the tax cuts of President Donald Trump and slowing down global growth.
Pros for Cox Automotive explained the market is currently seeing fast deceleration during the year in the peak in growth. Gross domestic product growth hit 4.2% in last year’s second quarter, however, has slowed since. A revision in fourth-quarter amounts took growth to 2.2 percent.
The U.S. economy is also affected by a slowing worldwide economy that’s been struck by commerce uncertainties, the Cox analysts stated.
Charles Chesbrough economist for Cox Automotive, said 85 million new automobiles have been purchased by Americans throughout the previous five decades. “There’s not that much demand that is left unfulfilled on the market,” he explained. “Were in the late phases of this business cycle.”
In addition, Chesbrough said that he expects a list 4.1 million vehicles to come back to the market this year mostly from two- and – three-year leases. That gives users a decision to buy late-model vehicles at around a 40% reduction from fresh ones, ” he said.
But even with a decrease that quarter, auto sales continue to be healthy. Patrick Manzi, senior economist with the dealers’ association, stated that although customer confidence is waning, it remains high, revealing that consumers still are willing to make purchases. Job gains have been steady and wage growth has been accelerating.
Here’s how automakers fared from January
— General Motors, down 7% to 665,840. Chevrolet Silverado pickup revenues were off 15.7 percent, and it had been bumped from its usual place as the nation’s No. 2-selling vehicle by the Ram pickup.
— Ford sales fell 1.5percent to 572,707.
— Toyotadown 5% to 543,716. Earnings of the RAV4 compact SUV dropped 8.4%.
— Fiat Chryslerdown 3.2percent to 498,425. Ram pickup earnings rose up 15.4percent to 120,026, but Jeep earnings fell 7 percent.
— Honda published a 2% growth. Sales of the midsize Accord rose 4.6%.
— Nissandown 12.1% to 365,851. Sales of the Nissan Rogue small SUV, were away 19.4%.
— Subaru earnings rose 4.7percent to 156,754, directed by the Forester with a rise of 9.6%
— Hyundai brand sales were up 2.1% to 147,585, headed from the Tucson SUV with a 3.4percent increase.
— Kia earnings rose 7.6percent to 136,596, headed from the Soul little SUV with 19.3% growth.
— Volkswagen new sales increased 2.3percent to 85,872. Jetta sedan sales rose 58%.