Most major automakers on Tuesday posted lower amount of new U.S. vehicle sales for April as consumer demand continued to weaken and competition intensified after a lengthy increase for the industry.
According to Autodata, the seasonally adjusted yearly rate of sales for April hit 17.15 million units compared with 17.04 million an year earlier. That was in line with an April SAAR of 17.1 million units expected by experts polled by Reuters.
Auto sales have been on a bit of a roller coaster ride in 2018, with a weak performance in February after a jump in sales for some automakers in March.
Ford Motor reported a 4.7-percent reduction in sales compared to April last year, with retail sales to consumers dropped 2.6 percent. The No. 2 U.S. automaker stated sales of its best-selling F-Series pickup trucks increased 3.5 percent, but SUV and passenger car sales dropped 4.6 percent and 15 percent respectively.
For years, U.S. consumers have been moving away from conventional passenger cars in favor of larger and more sophisticated pickup trucks, SUVs and crossovers.
Ford last week outlined a plan to slash costs and increase profit margins that consists dropping traditional sedan models in North America.
But the estimate of new models vying for a share of the SUV market is increasing faster than demand, threatening the huge profits automakers have enjoyed.
“That is a very competitive part of the market … with so many new entries,” Ford’s U.S. sales chief Mark LaNeve stated of the SUV segment on a conference call with experts and reporters.
In 2017, U.S. auto sales dropped 2 percent after hitting a record high of 17.55 million units in 2016. Sales are expected to fall more in this year as higher interest rates push up monthly car payments. Also, millions of almost new vehicles will return to the market this year after coming off lease, giving a lower-cost alternative for consumers.