US Auto Sales Slump In January As Car-Buyers 'Turn Japanese'

2018 started off with a disappointment for the auto industry with total sales at 17.07mm SAAR (missing expectations and down from 17.76mm in Dec).

Domestic auto sales dropped notably to 13.10mm in January - that is the biggest Dec-to-Jan drop since 2010...

 

US automakers suffered the most (Ford sales -6.3%) but Japanese makers surged (Toyota, Nissan up double-figures).

 

As Bloomberg reports, General Motors, Ford, and Fiat Chrysler all posted U.S. sales that fell short of analysts’ estimates for last month, as demand plunged for domestic sedans including the Chevrolet Cruze and Ford Fusion. Toyota Motor, and Nissan Motor, meanwhile, boosted deliveries thanks to RAV4 and Rogue crossover models.

The Detroit Three are coming off the first annual sales drop in their home market since the recession and are having a harder time coping with consumers abandoning passenger cars. Some automakers also may have endured a bit of a hangover -- the industry ended 2017 with its best showings of the year, thanks in part to heavy discounting.

“This is a bumpier start to the year than we expected,” Jeff Schuster, an analyst with LMC Automotive, said by phone. “Payback plays a role here after the robust fourth quarter of last year and the heightened level of incentives.”

To be sure, January wasn’t a slam dunk for the Japanese automakers. Honda reported a surprise decline. And Barclays Plc analysts who predicted the big jump for Toyota said in an email that the company boosted sales to fleets during the month.

About 29 percent of Nissan’s U.S. deliveries were to fleet customers -- including its own dealers -- during the first 11 months of last year, according to Autotrader.

“It is safe to assume that Nissan will still rely heavily on rental sales to start 2018 to gain market share,” said Zohaib Rahim, an analyst for the car-shopping website.

And there’s a downside to automakers having managed to keep sales more or less steady: use of heavy discounts.

“In the face of very high consumer confidence, low interest rates, low gas prices, longer and longer loan terms, we’re still seeing the pedal through the floorboards on incentives,” said Mark Wakefield, head of the auto practice at consultant AlixPartners. “You’re training consumers to look for the deal.”

Comments

Paul John Smith Thu, 02/01/2018 - 17:46 Permalink

Toyota Financial repossessed my CAMRY a few weeks ago ... so ... I'm only an unemployed software engineer ... I'm SURE the vast majority will keep making their car payments.

(totally believable)

Paul John Smith JRobby Thu, 02/01/2018 - 17:57 Permalink

It's all good - I don't have kids, no one depends on me. If I decide to go to the next level, homelessness, well ... shit ... at least it's a decision for me - I have a friend who is letting me couch surf in Seattle. At some point, that generosity will wear thin, and I will take the next rung down. No biggee, I'm just ahead of the curve.

In reply to by JRobby

new game GubbermintWorker Thu, 02/01/2018 - 19:08 Permalink

japs are still kicking the crap out of merican quality. those merican engineers will never get it, will they?

tip, hint or otherwise.

this to an merican car ceo,

go buy an accord or camry and bring it into a separate rooms and disassemble them down to every component and examine them closely. for example, the copper windings in an alternator. why does yours always fail? duh, you corner cutting cuks.

why does your garbage cars rattle the fuk at 59k miles? duh, cheap foam strips don't work, plus the glue dries up. you dumb fuking idiots get what you deserve. a car that is a pos at 150k with no resale...

i could site another 100 examples of inferior quality and cuk corner cutting. fuking junk with style...

once one buys quality and enjoys the rewards they never go back to merican junk...

my first toyota was a 90 celica. i drove it hard and it never nickle and dimed me. when the day came to sell it i got nearly the price i paid for it 5000 vs 4000 and i drove it over 50k miles...

In reply to by GubbermintWorker

Daddio7 lulu34 Fri, 02/02/2018 - 00:32 Permalink

My 1998 Chevy 4x4 has a touch of rust on the roof, 155k, only repair was a new AC compressor. My wife's 2000 Mercury Grand Marquis has zero rust, 210k, only repair was a new throttle position sensor.. It did start idling rough if the temperature drops below 40F so my wife got another car, a 2014 Buick Encore. I bought my first car in 1974, a 74 Ford Maverick , I have always bought American makes and keep my cars and trucks for 10 or more years.

I did drive a new Lexus once but the Buick seems about the same to me. Maybe foreign cars are like beer, people who drink beer get addicted for some reason. No, never tried beer either, well once, but it was nasty, felt no need to try more.

In reply to by lulu34

COSMOS Paul John Smith Fri, 02/02/2018 - 02:54 Permalink

Its not just your industry, I was talking to a medical lab guy and he was telling me how they had this H1B hired by corporate working 14 hour days. These guys are used to suppress wages and turn working conditions for everyone else to shit. Once they get their green cards they move on from the serfdom.  Good luck asking for a raise when they can pay this dude peanuts and leverage that against you.  They kept the place understaffed, overworked and underpayed.

https://www.quora.com/How-long-after-getting-my-H1B-should-I-wait-befor…

There is a whole industry built up around this slave trade.

In reply to by Paul John Smith

Yen Cross Thu, 02/01/2018 - 17:48 Permalink

  I'm confused. Why would anyone want to even think about purchasing a new{ Japanese or European} car, [or leasing] with bond yields spiking, and the $usd in the toilet bowl?

Termin8or Thu, 02/01/2018 - 17:49 Permalink

these numbers must not include Tesla since i am sure all of the customers abandoning GM, FORD, CHRYSLER are running down to their local Tesla dealer and buying that superior product /SARC 

MusicIsYou Thu, 02/01/2018 - 17:51 Permalink

American cars are junk and American automakers can only survive on bailouts. Bailouts are a facet of Socialism, so no wonder American cars are junk, the cars don't have to be great because they'll get a bailout anyway. The world has totally lost interest in buying American crap.

VWAndy Thu, 02/01/2018 - 17:55 Permalink

 US car makers are falling behind big time. HCCI and Variable CR technologies are going to leave US car makers in the dust globally. These early versions are close. It wont take them long to figure out the rest of it.

  Yall been warned.

CuriousPasserby Thu, 02/01/2018 - 17:56 Permalink

Two months ago I bought my first foreign vehicle in 48 years of driving because Ford stopped making the Ranger pickup, and I don't want their huge trucks.My 2004 Ranger was just what I needed, but after 13 years I wanted a new one and Ford didn't make them any more.

coast1 Thu, 02/01/2018 - 17:57 Permalink

I am sure this has happened before...Sometimes we dont check history...the dollar for example: 2008 thru 2015 the dollar was less than it is now..Quite a bit less a few times..Then it went thru the roof in 2015, and now its coming down a bit...Nothing to get panties in a bundle i suppose...

buzzsaw99 Thu, 02/01/2018 - 18:01 Permalink

most cars and trucks are made for midgets these days.  the old dodge charger, now that thing had leg room.  the only car i ever owned that i didn't have the seat all the way back.

Endgame Napoleon buzzsaw99 Thu, 02/01/2018 - 21:36 Permalink

Funny, I am fine with really small cars. I prefer them. But some men are big and actually need the extra space in a car. When I sold insurance, I felt sorry for this towering, large man whose wife was really cracking the whip, making him drive the same tiny, compact car that I had. He had to be uncomfortable in it every minute he drove it. It was one of the smallest cars made. ZHedgers would be proud of this woman, though. She met the definition of the no debt / no-nonsense minimalism. This was a minority couple, with kids that behaved perfectly in the store, and he drove this tiny, paid-for car, paying the premiums regularly, although he was a giant. 

In reply to by buzzsaw99