By Nick Carey
DETROIT (Reuters) - Automakers posted mixed U.S. new vehicle sales data for January, with American consumers showing little sign they will stop abandoning passenger cars for the larger pickup trucks, SUVs and crossover models that manufacturers also love because they are far more profitable.
U.S. auto industry sales fell 2 percent in 2017 to 17.23 million vehicles after hitting a record high in 2016 and are expected to drop further in 2018 despite a solid economy. Interest rates are rising and around 4 million late-model used cars will return to dealer lots this year to compete with more expensive new ones.
Automakers have used consumer discounts to boost sales, a growing concern for observers who say this undermines resale values and profits. Discounts declined in January, but remained above 10 percent of manufacturers' recommended prices.
""I think the industry has accepted that (sales) volumes will fall somewhat in 2018,... and I don't think the industry is going to go over the cliff with insane incentives," Mike Jackson, chief executive officer of AutoNation Inc (N:AN), told Reuters after his company, the largest U.S. auto retail chain, posted a higher quarterly net profit.
Mark Wakefield, head of the North American automotive practice for consultancy AlixPartners, had a gloomier perspective. The industry's less-than-stellar sales performance for January showed "we are now past the peak," he said.
"Automakers are now selling the deal instead of the vehicle," he said. "That's a tough spot to be in because that treadmill is hard to get off once you're on it."
General Motors Co (N:GM) said January sales rose 1.3 percent, driven by a 16 percent rise in fleet sales. Sales to consumers fell 2.4 percent. GM posted strong gains for models such as the Silverado pickup truck and Equinox crossover model, while its passenger cars continued to struggle.
Ford Motor Co (N:F) posted a 6.6 percent sales decline for January, with retail sales down 4.3 percent.
Sales of Ford's F-Series pickup trucks - America's best-selling vehicle brand for decades - rose 1.6 percent. Passenger cars were down more than 23 percent.
Passenger cars "continues to be a difficult segment as we see a continued shift into SUVs," Ford's U.S. sales chief, Mark LaNeve, said on a conference call. "We anticipate continued migration” from cars to SUVs over the next five years, he added.
Ford has garnered negative headlines as it works to improve results and rejig its product lineup.
Toyota Motor Corp's (T:7203) sales rose 16.8 percent in January. It noted strong demand for its pickup trucks and SUVs, plus its revamped Camry passenger car, whose sales rose more than 21 percent. Toyota has bet on boosting its share of the shrinking passenger car market with the all-new sedan.
Fiat Chrysler Automobiles NV (MI:FCHA) (N:FCAU) said new vehicle sales fell 13 percent in January, driven by a 50 percent drop in fleet sales, in line with the automaker's strategy to reduce these lower-margin sales to rental agencies, businesses and government bodies.
Fiat Chrysler sales to consumers rose 2 percent to their second-highest level since 2001.
Nissan Motor Co Ltd (T:7201) said its sales rose 10 percent in January, with pickup trucks, SUVs and crossovers up 18 percent. Sales of the luxury Infiniti brand, however, fell 8 percent, driven by a decline in fleet sales.
Judy Wheeler, head of U.S. sales for the Nissan brand, said the recent U.S. tax overhaul should be a positive for sales in 2018.
"I think customers will have more disposable income ... and we'll see them come in to get into a new vehicle," she said.
Honda Motor Co Ltd (T:7267) said its sales fell 1.7 percent in January, with both car and truck sales down.
GM shares were virtually unchanged at $42.41, while Ford was down 5 cents at $10.92, and Fiat Chrysler was off 0.6 percent at $24.01