Automobile: US auto sales rise but boom seems to be ending

People should get used to a lot slower growth: analyst

NEW YORK: Automakers reported another month of higher US sales in March on Friday, but there were signs the multi-year boom may be coming to a close.

The auto industry, which has enjoyed seven consecutive years of US sales growth, sold a total just fewer than 1.60 million vehicles in March, according to Autodata.

That is an increase of 3.1% from the year-ago period, but about 60,000 below the level expected by analysts at Edmunds.com.

The March sales were “okay,” said Morningstar analyst David Whiston. “We may have peaked last year.”

“I think people should get used to a lot slower growth in the US auto industry than what we’ve enjoyed post-recession. We’ve had a really nice run, one of the longest stretches of annual sales growth since the 1920s. So that’s not normal for growth.”

US auto sales hit a record 17.47 million in 2015, as low interest rates and gasoline prices boosted consumer purchases, with especially strong sales of sport utility vehicles (SUVs) and pickup trucks.

But auto analysts have cautioned that the boom could not go on forever, with many predicting declining sales in 2017, if not this year.

The March sales put US sales at an annual rate of 16.57 million, Autodata stated.

“It’s not a horrible number, but it’s not a great number either,” Whiston said.

General Motors (GM), the largest US automaker, notched a 0.9% rise in sales compared with the year-ago period at 252,128 vehicles.

GM said the Federal Reserve’s go-slow signal on future interest rate increases after a small hike in December would likely keep sales high. 

Published in The Express Tribune, April 3^rd, 2016.

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