Chrysler (BIT:FCA), Ford (NYSE:F) Disappoint, As Car Sales Plunge

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us auto sales

Automobile sales in the United States are lower than estimates, which were not too optimistic anyway. Fiat Chrysler Automobiles (BIT:FCA) and Ford Motor (NYSE:F) have reported the biggest declines, but many other auto makers are not too far behind. Heavy incentives have failed to prevent the plunge in the compact and sedan models. The stocks of automakers are naturally on the decline.

Last month, Ford’s deliveries slumped by a massive 7.2 percent, while Fiat Chrysler reported a 4.6 percent decline. Honda Motor too reported a drop. One exception was General Motors (NYSE:GM), which reported a growth of 1.6 percent. Analysts had predicted that GM would do better, but eventually, this growth proved to be less than the predictions.

Mid-size cars are the worst affected. One reason for this decline is because many consumers are increasing looking at trucks and SUVs.

Automakers Have Huge Unsold Inventory

Auto sales have been going down since the beginning of this year. There was hope that this slide would be finally arrested because the automakers are offering big discounts to reduce the inventory, which is presently at the highest level in more than a decade. In fact, General Motors has already reduced the output of the Chevrolet Cruze. Fiat Chrysler too is stopping the production of models, such as the Dodge Dart compact.

Michelle Krebs, an analyst with Autotrader.com said, “Sales are under forecast, and there were a lot of incentives during the month. Before long, we will see more production cuts”.

Ford, GM, Fiat Chrysler Stocks Take a Plunge

The deliveries of Ford’s Fusion and GM’s Chevrolet Malibu have both gone down by more than 35 percent in March. Their stocks too took a hit. The General Motors stock is down by 4.4 percent and is presently worth less than Tesla by market capitalization. The Fiat Chrysler (BIT:FCA) stock has taken an even bigger hit. It is down by 6 percent.

Jeff Conrad, the senior vice president of Honda’s U.S. sales unit says many automobile manufacturers are at this time “looking for signs of market stability”.

Nissan Motor managed to increase their sales by 3.2 percent amid all this, beating the estimates of analysts. They had predicted a 2.8 percent gain. The deliveries of Rogue crossover have gone up by 43 percent in March, as it keeps outselling Honda’s CR-V, which has been a longtime segment leader.