Nissan's Shock Sales Plunge Jolts U.S. Market Equilibrium
Nissan Motor Co.’s U.S. sales plunged last month, shocking analysts.
(Bloomberg) -- Nissan Motor Co.’s U.S. sales plunged last month, shocking some analysts and dragging on what was otherwise a strong April for auto demand.
The Japanese automaker’s deliveries declined 28 percent in April, with almost every model in the Nissan and Infiniti lineups falling. Nissan shares fell as much as 1.8 percent in Tokyo trading Wednesday. While Ford Motor Co. and Fiat Chrysler Automobiles NV beat analysts’ estimates, their shares reversed gains after Nissan’s report.
“Our eyes are bugging out here,” Michelle Krebs, senior analyst for researcher Autotrader, said of the Nissan’s numbers. “They’ve been very heavy with rental-car sales and rich incentives. It looks like they’re pulling back.”
Automakers were going to have a difficult time reporting sales gains in April due to a quirk of the calendar. There were two fewer selling days -- which excludes Sundays and holidays -- last month than a year ago. So while almost all major carmakers posted declining deliveries, as analysts expected, the annualized sales rate accelerated to 17.1 million, according to researcher Autodata Corp.
Calculating the annualized sales pace, which topped last April’s 17 million, is becoming more difficult. General Motors Co. announced last month that it would report U.S. sales only on a quarterly basis, complicating efforts to gauge the health of the world’s most lucrative auto market.
Altima, Rogue Slump
Sales of the Altima sedan, usually Nissan’s top car, dropped by almost half compared with a year ago. And the company’s leading sport utility vehicle, the Rogue, dropped 15 percent. While deliveries to both retail and fleet customers declined, the automaker expects that its results will improve when the new Kicks crossover and redesigned Altima reach dealers, spokesman Chris Keeffe said.
“We were on track for a fairly healthy SAAR,” or seasonally adjusted annualized rate of sales, in the low 17-million range, said Charlie Chesbrough, senior economist for researcher Cox Automotive. “But Nissan threw a big monkey wrench in that.”
GM’s U.S. sales fell 2.5 percent to 3 percent in April, according to people familiar with the matter. The result, shared by people who asked not to be identified because the information is private, is in line with analysts’ average estimate for a 2.9 percent decline.
GM’s shares declined 1.4 percent, while Ford and Fiat Chrysler’s closed little changed.
Trucks, SUVs Gain
Consumers are making a mad dash to SUVs and trucks across the industry, with every major automaker reporting declining passenger-car sales. Toyota Motor Corp.’s Camry and Honda Motor Co.’s Accord, which often vie for the title of best-selling U.S. sedan, declined 5 percent and 19 percent, respectively.
Even with gasoline prices rising each of the last two months to the highest since November 2014, the mass migration from cars continues unabated.
“This is not going to derail the shift to SUVs,” said Mark Wakefield, head of the auto practice at consultant AlixPartners. “Consumers haven’t seen it go up enough or fast enough to start making big changes. The crossover has become the new sedan.”
Ford sales dropped less than expected as the F-Series pickup line gained. The only Ford or Lincoln car that U.S. consumers bought more of in April compared with a year ago was the GT -- a $400,000 supercar -- highlighting why the second-largest U.S. automaker is shifting investment toward pickups and SUVs and abandoning sedans for the North American market.
Jeep carried Fiat Chrysler to a surprise gain in total deliveries, with the all-SUV brand’s sales climbing 20 percent. The Compass has been a major source of strength for the brand lately because of easy year-over-year comparisons -- the compact model was just trickling into showrooms at this time in 2017.
--With assistance from David Welch and Sam Nagarajan
To contact the reporters on this story: John Lippert in Chicago at jlippert@bloomberg.net, Gabrielle Coppola in New York at gcoppola@bloomberg.net, Keith Naughton in Southfield, Michigan at knaughton3@bloomberg.net.
To contact the editors responsible for this story: Craig Trudell at ctrudell1@bloomberg.net, Jamie Butters
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