Rising prices pinch car buyers in April
April was a largely disappointing month for U.S. auto sales as rising car prices pinched buyers' pockets.
The average price of a new car was roughly $36,720 in April, according to Edmunds. That's the highest level so far this year as interest rates remain above 6%.
"April sales were a bit dampened by the harsh financing conditions we’ve been seeing in the new-car market," Edmunds analyst Jessica Caldwell said in a statement. "Shoppers are really starting to feel the pinch as prices continue to creep up and interest rates loom at post-recession highs."
Fiat Chrysler Automobiles' U.S. sales fell 6% while Toyota Motor Corp.'s deliveries slipped 4.4%. Honda Motor Co.'s sales were essentially flat last month while Hyundai eked out a 0.6% increase.
Bucking the trend was Nissan Motor Co., up 11.2% in April, and Volkswagen, up 8.7%.
As the post-recession years of record-breaking sales fades further into the rearview mirror and monthly results are more mixed, Detroit's Big Three are bowing out of monthly sales reporting.
FCA said Wednesday it is switching to quarterly sales reports. The automaker will continue monthly reports through the second quarter, beginning quarterly dispatches on Oct. 1.
General Motors Co. was the first to switch to quarterly sales a year ago, and Ford Motor Co. followed at the beginning of this year.
"A quarterly sales reporting cadence will continue to provide transparency of our sales results while at the same time aligning with where industry practice is heading," FCA's Chief Communications Officer Niel Golightly said in a Wednesday statement.
FCA's year-to-date sales are down 4% at 671,325 units.
"April marks the start of the spring selling season and we anticipate strong consumer spending as we move through May," FCA's U.S Head of Sales Reid Bigland said. "The industry may be shaking off the first-quarter sluggishness, but shoppers are coming into showrooms and buying."
FCA's Ram truck brand was the only of its six brands to post an increase in sales last month, up 25% from the same month in 2018. The Ram pickup posted a 25% gain with 49,106 units sold. Ram is up 22% for the year.
The Jeep brand fell 8% in April compared to the same month last year, driven down by a 25% decrease in Wrangler sales and 13% drop in Cherokee sales. The Grand Cherokee and Compass were the only two Jeep models to post gains, up 23% and 10%, respectively. Jeep sales are down 7% for the year.
Chrysler sales fell 37% while Dodge slipped 24%. FCA's Fiat brand saw a 34% dip in sales last month while Alfa Romeo was down 14%.
Shrinking interest in passenger cars, partially driving the overall increase in car prices, continued to pinch sedan juggernauts like Toyota and Honda. Toyota's Corolla sedan saw a 32.8% drop in deliveries while the Camry fell 2.1% in April. Honda's car sales fell 2.4%, driven down by an 11.5% drop in Accord deliveries.
"Fleet sales in April appear to have cooled from their impressive run in the first quarter. With overall sales down and fleet moderating, softness in vehicle sales still stems from weakness in the retail market," said Zo Rahim, an analyst for Cox Automotive. "Affordability concerns coupled with attractive supply in the used-vehicle market might suggest retail sales might not bottom out for the foreseeable future."