General Motors, Ford, and Fiat Chrysler all posted disappointing April sales, raising doubts about the health of the auto market and the consumer in the United States as well as the ability of the automakers to manage growing inventory levels.
General Motors unit sales fell 5.8% versus Kelley Blue Book’s forecast of a decline of 0.7%. The company highlighted strong sales of crossover vehicles, up 27%, and projected that they would continue to increase in the overall mix of vehicles sold in the United States. Days of sales outstanding, a measure of inventory, increased to 100 days from 98 days in March.
Ford saw sales fall 7.2% against a 5.5% projected decline. Car sales declined by 21%, while SUV sales and truck sales somewhat offset the decline in passenger cars. Ford’s inventory also rose, from 66 days sales outstanding to 72 at the end of April.
Fiat Chrysler’s sales declined by 6.6% versus a 5.8% projected decline, although the company cited a purposeful decline in fleet sales as a big reason and efforts at reintroducing the Alfa-Romeo line appears to be off to a good start with nearly 700 deliveries.
One fewer selling day this year also hampered auto sales, but was factored into projections. Analysts worry about auto sales peaking due to rising interest rates and a potentially tighter credit environment. Shares of General Motors, Ford, and Fiat Chrysler all headed lower after reporting sales. Still GM’s chief economist sounded an optimistic note, saying, “When you look at the broader economy, including a strong job market, rising wages, low inflation and low interest rates, and couple them to low fuel prices and strong consumer confidence, you have everything you need for auto sales to weather headwinds and remain at or near historic highs.”
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