In this Sunday, Feb. 3, 2019, photograph, a long row of unsold 2019 911 Carrera GTS cabriolets sits at a Porsche dealership in Littleton, Colo. Borrowers are behind in their auto loan payments in numbers not seen since delinquencies peaked at the end of 2010, according to the Federal Reserve Bank of New York. (AP Photo/David Zalubowski)
INTERNATIONAL - Most major automakers capped the first quarter with declining U.S. sales again in March, as the sugar high from last year’s tax cuts wore off and the economy lost steam.

Fiat Chrysler Automobiles NV, Nissan Motor Co. and Toyota Motor Corp. each reported deliveries dropped for the month and are down year-to-date. General Motors Co., which releases results only on a quarterly basis, said sales slumped across all four of its brands.

After downshifting in the second half of last year, economists project growth in U.S. gross domestic product was just 1.5 percent in the first three months of the year, the lowest in three years, according to forecasts compiled by Bloomberg. The Federal Reserve’s decision last month to put interest rates on hold may limit the damage for an auto market that’s seen borrowing costs reach a 10-year high.

“The economy is not as strong as it was a year ago,” Michelle Krebs, executive analyst for Autotrader, said by phone. “Last year we had the euphoria over tax reform, and now we have the reality of that.”

While most carmakers were down for the month, sales slipped less than analysts estimated for Toyota and Nissan, and Honda Motor Co. exceeded expectations thanks in part to the all-new Passport sport utility vehicle.

Smaller automakers Subaru Corp., Hyundai Motor Co. and Kia Motors Corp. also posted gains despite having one fewer day to sell cars than last month, fueling a better-than-anticipated industry selling rate of about 17.5 million, according to researcher Autodata Corp. That’s better than any analyst estimated in a Bloomberg News survey and is the best pace since December.

Shares of GM, Fiat Chrysler and Ford Motor Co., which releases its quarterly sales results Thursday, all closed higher Tuesday in New York trading.

While SUVs and big trucks carried the industry to a surprise gain in 2018, key models in those segments are sputtering early this year. Fiat Chrysler’s Ram pickup may have been the only full-size truck line to boost deliveries for the quarter, as GM continued to build up inventory of its redesigned Chevrolet Silverado and GMC Sierra models.

First-quarter deliveries dropped for every Jeep SUV except the top-selling Grand Cherokee model, while Toyota’s RAV4 and Nissan’s Rogue crossovers also slumped.
Meanwhile, the sedans that have seen demand crater the last few years are showing early signs of bottoming out. Honda, which said in January that trucks and SUVs may be reaching their limits as a share of industry sales, said car deliveries for its namesake brand were up 5.3 percent in March and flat for the quarter. 

Starting to Stabilize

Deliveries for Nissan’s second-best selling car, the Sentra compact, rose 2 percent in March and the Altima sedan dropped just 1.9 percent , both improving from weak performances in January and February.

“The segment is fairly stable for sedans, though they’re still not where they were a few years ago,” Billy Hays, the head of Nissan brand sales in the U.S., said in a phone interview.

Toyota’s Camry and Corolla deliveries continued to drop in March, but its executives think the worst may be over when it comes to the shift from cars to crossovers and light trucks.

“The pace of the change has decreased,” Jack Hollis, the Toyota brand sales chief in the U.S., told reporters on a conference call. “We’re very close to a bottom.”

Uncertain Returns

Taxes are likely to continue to be a focal point for consumers leading up to the April 15 filing deadline.

Fewer Americans are getting refunds this go-round, with the Internal Revenue Service issuing about 53.5 million as of March 8, approximately 40 percent of the total anticipated for the year. People who have a liability tend to file later, so the refund data could become bleaker as the filing season wears on.

“There remain areas of uncertainty facing U.S. consumers, including smaller tax returns for many,” said Stephanie Brinley, an auto analyst for IHS Markit. “With automakers seeming to hold the line on incentives, we may also be seeing impact of less to draw consumers into showrooms.”

BLOOMBERG