The Softening Auto Market in Q1 ’17

March finished below expectations, finishing a downward-trending first quarter of three consecutive monthly year-over-year declines in the US auto market.

March’s final tally came in at 1.55M units, down 1.6% from March 2016, while the first quarter total of 4M units was also off 1.4% year-over-year. The market’s seasonally-adjusted annualized rate (SAAR) of US auto sales in March was 16.5M units, the lowest SAAR in 2.5 years.
Modest gains during Q1 by GM, Nissan, and Honda weren’t able to offset larger year-over-year declines by Ford (-4.3%), Toyota (-6.4%) and Fiat-Chrysler (-8.7%). Passenger cars continued their long-tail volume contraction, declining another 11.5% in March alone. The balance of light trucks versus cars sold continues to be historically high in favor of light trucks.

The biggest “share-grabbers” in the US market for Q1 were VW, Subaru, and Audi. Kia finished with the largest percentage decline, at -12.7%.
Even with missed expectations, this decline wasn’t a huge surprise, as pent-up consumer demand had been absorbed over several years worth of market expansion. Additionally, incentives were down in March, and tax season has been lagging (refund processing is taking longer), taking more shoppers out of the market.

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Q1 2017 US Auto Market | Source: WardsAuto InfoBank

Your ESA Car Keys recap follows.


MARCH 2017 HIGHLIGHTS
Wards Auto and NADA MarketBeat

  • March SAAR: 16.5 units
  • March Units: 1.55M vehicles sold
  • Change: DSR* -1.6% | Volume -1.6% vs March 2016
  • Q1 Gainers (by Volume): VW +10.1%, Subaru +9%, Audi +8.8%,  Nissan +4.2%, Honda +2.1%, GM +0.8%,
  • Q1 Laggards (by Volume): Kia -12.7%, FCA -8.7%, Toyota -6.4%,  Ford -4.3%, Hyundai -2.6%

Be sure to visit NADA’s MarketBeat, or Wards Auto for a concise recap of the US automotive market.
Follow ESA on Twitter or Facebook to get your daily helping of local market intel.
*DSR: Daily Sales Rate. A more reliable indicator of the pace of auto sales which accounts for actual car-selling days per month.*SAAR: Seasonally-Adjusted Annual Sales Rate.SOURCES: Wards Automotive InfoBank, NADA MarketBeat, Automotive News.


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Author: Dave Eckstein

Dave Eckstein is a partner in the firm ESA & Company. You can follow Dave on Twitter @DaveEckstein.

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