By Danni Santana
The U.S. auto industry reported relatively flat sales in March, a sign the market is beginning to plateau after months of healthy growth.
Automakers sold a total of 1.5 million vehicles last month, according to Autodata Corp, better than the consensus forecast of a small decline.
Analysts initially predicted a small dip in year-over-year sales in March, about 0.8 percent, ending a stretch of consecutive monthly gains dating back to last February. A slight uptick of 0.6 percent, however, kept industry sales afloat, at least for the time being.
“We are back to levels we were seeing before the recession,” said Scott Brown, chief economist at Raymond James & Associates. “Sales are following a new trend, but are still very respectable. We’ll end up around the same levels we did last year.”
March’s year-over-year comparison was distorted by weather. Last year brought with it a surge in sales after an unseasonably cold February. By comparison, this March witnessed continued snowfall in many parts of the country. It also had one fewer sales weekend.
Some forecasters continue to believe sales will accelerate. David Sloan, senior economist at 4cast.inc, believes sales in 2015 will surpass 17 million cars sold for the first time since 2001. He points to the annualized sales rate– a monthly measure used to estimate sales output over a 12-month period– as the reason why. The annual rate in March rose nearly 1 million from 16.2 million in February.
“We rebounded nicely from February and the worst of the weather is behind us,” said Sloan. “Consumer spending, buoyed by stronger employment growth and subdued prices, will drive sales.”
But the tiny increase in March indicates growth may slow enough to keep automakers from reaching record highs. Manufacturers expected higher increases in sales after 14 percent gains in January and 5 percent in February, both much colder months.
Four of the six major automakers in the U.S. announced declines in sales, most notably Honda, which suffered the largest decrease in sales of all its competitors at 5.3 percent. General Motors and Nissan also saw sales drop over 2 percent.
Ford Motor continues to struggle after a rough 2014. Its sales dropped 3.5 percent last month due in large part to sagging pick-up sales, down 4.6 percent. The automaker is still producing its new aluminum bodied F-150 model, expected to be in full supply at dealerships in time for the summer-time rush.
Fiat Chrysler and Toyota stood as the only winners last month. Chrysler’s sales raised 2 percent. Meanwhile Toyota bested everyone with its 5 percent increase, thanks to a 12 percent boost in truck sales.
Many automakers, just like Toyota, benefited from truck sales in March. Both General Motors and Nissan had truck sales climb over 10 percent, helping to minimize their decline. Overall, trucks represented 52 percent of total sales, after accounting for 54 percent in February.
“Truck sales have been good all 3 months to begin the year,” said Dick Scott, a car salesman at a Chrysler dealership in Plymouth, Mich. “We are actually starting to run out of our dodge ram express. We’ve sold multiple in the last couple of days.”
Consumer preference of gas-guzzlers over smaller more fuel-efficient vehicles has been a trend since the dip in gas prices last August. But cheaper gas prices aren’t great for every market. In Oklahoma, for example, lower gas prices are a double-edged sword.
“A lot of people here work at oil refineries. So while a lower price of oil is generally a good thing, many in the area have their paychecks seriously affected or lose their jobs altogether,” said Chas Grady, used car salesman at Bob Moore Ford in Oklahoma City.
“No matter what the price of gas is, trucks will always be our bread and better. They drive sales every year in our part of the country,” he added.