Automakers on Friday reported a decline in U.S. light vehicle sales for February as demand for SUVs slows after years of rapid growth, pointing to a drop in overall sales in 2019.
Toyota Motor Corp, the No. 3 automaker in the United States by volume, reported a 5.2 percent drop in sales to 172,748 vehicles due to declines in its flagship Camry sedan as well as its Tundra pickup trucks and Sienna minivans.
Smaller rival Fiat Chrysler Automobiles NV said sales fell 2 percent to 162,036 vehicles, weighed down by lower demand for its Jeep Compass and Renegade sport utility vehicles. It’s a change from recent months in which demand for Jeeps and Ram pickups has buoyed FCA sales.
“The overall industry is starting off slower due in part to weather, the U.S. government shutdown, and concern over tax refunds,” Reid Bigland, Fiat Chrysler’s U.S. head of sales, said in a statement.
Michelle Krebs, executive analyst at online marketplace Autotrader, said Fiat Chrysler’s Compass and Renegade models are typically purchased by more budget-constrained buyers, who might be facing some cash crunch at this time of the year.
Analysts have said that rising interest rates on auto loans could crimp demand this year. Higher interest rates translate into bigger monthly car payments for consumers and could prompt some of them to postpone purchases.
General Motors Co and Ford Motor Co, the top two U.S. automakers, have stopped reporting monthly auto sales numbers.
But Automotive News estimated that Ford’s U.S. light-vehicle sales fell 4.4 percent last month.
Industry consultants J.D. Power and LMC Automotive have forecast U.S. auto sales to dip about 1 percent to 1.29 million vehicles in February.
Japan’s Honda Motor Co Ltd reported a 0.4 percent dip in U.S. vehicles sales to 115,159 units, while Nissan Motor Co Ltd’s sales plummeted 12 percent to 114,342 units in February.
A poll of economists by Reuters expect U.S. car and light truck sales to fall to 16.80 million units on annualized terms in February, from 17.01 million units a year earlier.
U.S. President Donald Trump’s threat to impose a 25 percent tariff on imported cars risks a further hit to vehicle demand and profits for automakers, analysts say.
J.D. Power and LMC Automotive have estimated that tariffs could hit full-year demand by as much as 700,000 units.