Auto sales start ice-cold as all major carmakers disappoint
Auto sales got off to a frosty start to the year, with all major carmakers reporting weaker numbers than expected.
Nissan and Toyota posted bigger declines than analysts estimated in a Bloomberg News survey. Fiat Chrysler and Honda's gains trailed projections, and both companies blamed the cold.
"In spite of some frigid January weather, we remain bullish on 2019 given the continued underlying strength of the U.S. economy," Reid Bigland, Fiat Chrysler's head of U.S. sales, said in a statement. The automaker's only brand to grow for the month was Ram, with a 24 percent surge in truck and van deliveries.
The results suggest the annualized industry sales rate may have slowed more than anticipated. Analysts had been projecting a pace of 16.9 million car and light truck deliveries for the month, compared with 17.1 million in January 2018.
"Our sales were very strong in the beginning of the month," Henio Arcangeli, senior vice president of automotive operations for Honda's U.S. unit, said in a phone interview Thursday. "With the cold weather that's hit, particularly this week, as well as the government shutdown that we had a little bit earlier, it has slowed things down a little bit."
Auto demand is likely to shrink in 2019 as borrowing costs rise and make it tougher for consumers to afford ever-costlier new vehicles. The average interest rate on new cars jumped to 6.2 percent last month, from 5 percent a year ago, according to car-buying researcher Edmunds.
General Motors Co. and Ford Motor Co. no longer report monthly U.S. sales and have shifted to releasing data on a quarterly basis.
The red-hot Jeep brand had its first monthly drop since December 2017. Parent Fiat Chrysler cited freezing-cold conditions in the Midwest and Northeast.
"In contrast to previous months when Jeep was the champ, Ram saved the day," said Michelle Krebs, an analyst at Autotrader.
Fiat Chrysler put up weaker-than-expected numbers despite selling 50 percent more vehicles to fleet customers in the month. About 23 percent of the company's January deliveries went to fleets, up from a 16 percent share a year ago.
Nissan was undermined by a 40 percent plunge in sales of Altima sedans. That's a bad omen for auto executives who've said passenger cars may be bottoming out after falling to a record-low 30 percent share of the market last year.