DETROIT – Fiat Chrysler Automobiles and Ford both posted 8 percent sales increases in March, while sales at General Motors, which is relying less on sales to rental agencies, edged up 1 percent, as the industry remained on track to meet or exceed last year’s record number of sales.
Nissan sales jumped 12.7 percent in March from a year earlier. Honda’s sales rose 9.4 percent as its high-volume cars, the Accord (up 17.3 percent) and Civic (up 21.8 percent), were not hurt by a broader migration away from sedans.
Toyota sales slipped 2.7 percent, despite 15 percent increases for its Highlander midsize SUV and RAV4 crossover.
Volkswagen continued to struggle as its March sales dropped 10.4 percent. The German automaker has suffered from the political and marketing fallout from its diesel-emission scandal.
Industry sales are expected to exceed 1.6 million vehicles for the month. While that would be the highest monthly total in more than a decade, consumers had two more days to shop compared with March 2015.
FCA’s performance was led by Jeep (sales up 15 percent), while its Dodge brand posted an 11 percent increase. But sales tumbled 13 percent for Chrysler and 24 percent for Fiat as customers continued to shift toward crossovers, SUVs and pickup trucks and away from passenger cars.
The automaker sold more than 12,900 Dodge Grand Caravans in March, more than double the year-earlier volume. It also sold more than 13,500 Chrysler Town &Country minivans, a 148 percent increase. Dealers were trying to sell off inventories of minivans because the new Chrysler Pacifica minivan goes on sale this month.
Ford was led again by its F-Series pickup trucks, of which dealers sold more than 73,000 in March, up 9 percent from a year earlier. The Detroit-area automaker also saw substantial sales increases of models such as its Transit commercial van (up 53 percent). Sales of the new Edge crossover surged 49 percent.
At GM, sales fell at Buick (11 percent) and Cadillac (5 percent), but the losses were offset by a 1.4 percent increase at Chevrolet and a 7 percent gain for GMC.
Buoyed by Americans insatiable appetite for pickup trucks, sales of GM’s full-size trucks, the Chevrolet Silverado and GMC Sierra, climbed by 6 percent and 24 percent, respectively.
Two encouraging signs for Chevrolet were a 33 percent gain for the new Malibu midsize sedan and sales of 1,865 of its second-generation Volt, more than triple the year-earlier level.
But GM’s strategy of weaning off less-profitable fleet sales does come at a price. For example, sales of the Chevrolet Cruze, a common rental car, tumbled 59 percent to about 9,900. Chevy dealers will begin selling a redesigned Cruze in a few months.
Despite the positives seen in the March sales figures, there are signs the industry is near a plateau.
Fitch Ratings, a credit rating agency, reported that in March the percentage of subprime auto loans that were delinquent for 60 days or longer rose above 5 percent for the first time since 1996.
More and more consumers are leasing rather than buying their vehicles. That trend, which began earlier this decade, is creating a surge of 2- and 3-year-old used vehicles as those leases end. That puts downward pressure on used car prices.
Automakers like leasing because it means another sale at the end of the lease. But the gap between falling used vehicle prices and rising new vehicle prices means buyers must borrow more money or spread their loans out over seven or eight years.
Americans are taking out longer loans and leasing cars instead of buying at the highest percentage in years. In fact, 72-month loans now represent 34 percent of sales, rising for a sixth consecutive year.
Experian Automotive, which tracks the auto finance market, reported Friday that more than 1.8 million vehicles will come off lease over the remainder of 2016.
Melinda Zabritski, Experian senior director of automotive finance, said leasing has increased significantly among pickup trucks, SUVs and crossovers.
“What happens three years from now? Will gas prices be what they are today, or will dealers have a more difficult time moving these types of vehicles when their leases mature?” Zabritski said.
Also, the percentage of car owners facing negative equity – meaning they owe more than their vehicle is worth – is expected to hit a 10-year high in 2016, according to J.D. Power projections.
While the March sales were strong there is growing concern that without greater fleet sales than some automakers would like to maintain, the industry may struggle later this year to beat last year’s record of 17.5 million.
There’s also concern that the continuing shift from passenger cars to light trucks could have some negative impact on car prices.
Profit margins on pickup trucks and SUVs remain robust, but some of that may be diluted as automakers offer more generous incentives to pare their car inventories.
“Pricing performance on cars has been under pressure,” said Mark LaNeve, Ford vice president of U.S., sales, service and marketing. “We see slightly more incentive spending on cars, but not anything that would be alarming.”
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