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U.S. car sales dip about 5% in April

Nora Naughton
The Detroit News

U.S. auto sales declined an estimated 5 percent last month from an especially strong April the year before. But even as deliveries fell, prices and overall costs of vehicle ownership are still on the rise.

.Ford Motor Co. sold 204,650 vehicles in April, down 4.7 percent from the same month last year, while Fiat Chrysler Automobiles NV increased 5 percent in the same month.

The average price of a new car in April was $35,411, up 2 percent from the same month last year, according to car valuation and automotive research company Kelley Blue Book, as consumers continue to favor more pricey crossovers, SUVs and pickups. That’s relatively in line with where industry prices were in March, when average transaction prices topped $35,500.

At the same time, interest rates on new vehicle loans are creeping higher, reaching levels not seen since before the Great Recession, according to automotive analysis firm Edmunds, as with April marking the third straight month that the annual percentage rate on new finances vehicles rose above 5 percent at 5.6 percent. And the average monthly payment on new vehicles average $535 last month compared to $509 in 2017.

“Considering the fact that rates were in this territory 10 years ago, this isn’t an extraordinary phenomenon, but it is going to take a readjustment in the minds of consumers,” Jessica Caldwell, automotive analyst for online car information site Edmunds, said in a statement. “Car shoppers should brace themselves because this is likely a new normal.”

Fiat Chrysler Automobiles NV, which saw sales increase 5 percent in April, was the only Detroit automaker to see a decrease in average transaction prices last month, down 1.6 percent to $36,754 from April 2017, according to Cox Automotive. Ford Motor Co.’s average transaction price increased 2.1 percent to $39,906 and General Motors Co.’s average prices increased nearly 3 percent to $39,162.

Average transaction price is the only monthly metric available for GM for April. The Detroit automaker announced in March that it would cease monthly sales reports in favor of quarterly reports. Edmunds estimated that GM sold 237,464 vehicles in April, down 3 percent from the same period a year ago.\

Industrywide sales for April were estimated by Edmunds at 1,349,742, off 5 percent from the same period a year ago.

Seasonal volatility had something to do with that decline, and was part of GM’s decision to get out of the monthly sales game: April 2018 had two fewer selling days than 2017 and one fewer weekend, all factors that automakers are attributing to sales declines.

Ford Motor Co. sold 204,650 vehicles in April, down 4.7 percent from the same month last year.

Mark LaNeve, Ford’s vice president of U.S. marketing, sales and service, said the Blue Oval still sees value in monthly updates, particularly the practice of the conference call it holds with investors and media — something other automakers stopped doing in recent years. “We think that’s best for us right now, and for our business,” he said.

Both the Ford and Lincoln brand posted decreases in April, down 4.3 percent and 12.1 percent respectively. Only the Dearborn-based automaker’s trucks posted increases, in up nearly 1 percent on a 3.5 percent gain for the F-Series and a 4.5 percent increase for the Ford Transit.

Ford’s SUVs posted a 4.6 percent decrease while cars were down 15 percent in April. The automaker announced last week it is largely getting out of the car market and focusing on its more profitable SUVs and trucks.

The Expedition was down 22.3 percent overall in April on a decrease in fleet sales, while retail sales of the SUV increased 26 percent. Ford’s fleet sales were down 8.6 percent to 67,600 vehicles in April due to “order timing,” the Dearborn based automaker said.

The popular and pricey Lincoln Navigator posted a 122.4 percent increase, but wasn’t enough to carry the brand into a year-over-year increase. The MKT was the only other Lincoln vehicle to post an increase in April, up nearly 13 percent.

Fiat Chrysler’s increase in April was driven by a record month for its Jeep brand, up 20 percent from April 2017. That success was driven by gains for the Wrangler, Cherokee and Compass. Its Dodge brand also posted an increase in deliveries last month, up 4 percent as the Journey and Caravan were up 39 percent and 21 percent, respectively.

Sales of the automaker’s Ram trucks brand fell 9 percent in April. The Chrysler brand fell 18 percent and Fiat was down 45 percent.

Among foreign automakers, Nissan had a particularly disappointing month, with group sales declining 28.1 percent on losses for both the Nissan and Infiniti divisions.

“Nissan has been utilizing incentive and fleet sales more aggressively than other automakers for the last few years,” Karl Brauer, an automotive analyst for Cox Automotive said in a statement. “It appears the company’s strategy has dramatically changed, with dramatic results.”

The battery-electric Nissan Leaf was the only Nissan nameplate to post an increase, up 10.2 percent. Some of the most drastic declines were for the Pathfinder, down 52 percent and the Maxima, down 62.3 percent.

Honda Motor Co. saw sales slip 9.2 percent in April, with its Honda division down 8.4 percent and Acura down nearly 16 percent. Toyota Motor Corp.’s U.S. sales fell 4.7 percent, on a 2.1 percent decrease for the Lexus luxury division and a 5.1 percent decrease for the Toyota division.

Subaru, however, bucked the April doldrums trend with its best April ever. The Japanese automaker known for its all-wheel drive hatchbacks posted a 1.5 percent increase in April deliveries despite declines for every nameplate but the Crosstrek. But the massive 70 percent gain for the five-door crossover was enough to post the small increase for the brand overall.