GDP is off to a poor start in 2017.
Let’s investigate that statement with a look at auto sales, inventories, a recap of year-end 2016 industrial capacity, and weather-related GDP.
GM, Ford, Toyota, and Fiat Chrysler all reported sales declines in January supply is rising. Manufacturers announced factory shutdowns last month. Are more shutdown announcements coming?
The Wall Street Journal reports U.S. Auto Sales Cooled in January.
General Motors Co. sold 195,909 vehicles in the month, compared with 203,745 a year ago, for a sales decline of 3.8%. Retail sales declined 4.9%.
Ford Motor Co.’s sales, meanwhile, edged 0.7% lower to 171,186. The Detroit auto maker reported its retail sales climbed 6% while fleet sales declined 13%. Ford said its popular F-series pick up trucks—up 13%—saw their best sales start for the year since 2004.
And Fiat Chrysler Automobiles NV posted an 11% drop in sales to 152,218 light vehicles. Fleet sales led the way down with a 31% decline as the Italian-U.S. auto maker works to cut back sales to the daily rental segment.
Analysts called for a broad range of results in January. Edmunds.com estimating a relatively flat performance for the industry compared with the same period, while WardsAuto.com forecast a 4.4% decline and a much lower seasonally-adjusted annual rate of sales than what was recorded in December or the prior January.
December, fueled by record incentive-spending by auto makers, was among the best months for U.S. light-vehicle sales in history, helping the industry set a second-consecutive annual sales record. Auto makers are planning to build slightly more vehicles in North America in the first quarter than the same period a year ago, signaling optimism that 2017 full-year sales will remain in the 17.5-million range that was reached in each of the past two years.
Low gasoline prices, cheap financing and generous discounts are expected to continue propping up demand in the auto industry. JD Power recently estimated auto makers spent an average of $3,614 on average per-vehicle incentives in January, substantially less than December but 7% higher than January 2015.
Edmunds analyst Jessica Caldwell points out it is tricky to use January—the lowest volume month—as a bellwether for how auto sales will trend for the year.
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