DETROIT _ U.S. auto industry sales fell short of expectations in March as car sales continued to fall, raising concerns about rising incentives and bloated inventory even though the pace of new car sales remains robust from a historical standpoint.
Automakers sold 1.56 million new cars and trucks in March, a 1.6 percent decline compared with the same month a year ago. That would still work out to a strong annualized rate of 16.6 million cars and trucks for the year, but analysts had expected Monday's sales figures to be more than 1.62 million new cars and trucks _ a 2.2 percent increase.
The industry's decline in March may be modest but it shows that the industry has finally hit a plateau after seven years of increasing sales and two consecutive years of record totals.
"Certainly, we are not seeing huge growth in the market, but ... overall industry and pricing levels, I'd say are good," said Mark LaNeve, Ford's vice president of U.S. and marketing.
Among domestic automakers, sales fell 7 percent for Ford, 5 percent for Fiat Chrysler Automobiles and rose 1.6 percent for General Motors. Among foreign automakers, sales rose 3.6 percent for BMW, 3.2 percent for Nissan, 2.6 percent for Volkswagen, 2.0 percent for Mercedes-Benz, but fell 0.7 percent for Honda, 2.1 percent for Toyota, 8 percent for Hyundai and 15.2 percent for Kia.
Both domestic and foreign automakers struggled to sell cars but consumers are still buying enough pickups and SUVs to keep the industry on track for another strong year. In March, car sales only accounted for 39 percent of total industry sales.
That is putting pressure on automakers to adjust production and recalibrate incentives, making this a good time for consumers to shop, especially if they are going to buy a car.
"There are some big incentives ... but it's going to take some really careful shopping to get the best deal," said Michelle Krebs, executive analyst for Autotrader.com. "There will be great deals and improving deals out there."
LaNeve said Ford has cut back on production of cars and has boosted production of SUVs, which has helped the automaker cut its inventory of cars by 50,000 compared with last year.
Toyota's car sales tumbled 9.9 percent to 97,703 units. Sales of sport-utility vehicles, crossovers and pickup trucks increased 5.5 percent to 117,521, reflecting a record March.
Honda's once-stalwart lineup of cars also suffered in March as consumers continue to flock into bigger vehicles. Car sales fell 8.7 percent to 67,342 units, while sales of crossovers, sport-utility vehicles and pickup trucks increased 8.4 percent to 69,885.
Like Honda, Nissan's car sales suffered considerably, falling 15.4 percent, while sales of SUVs, crossovers and trucks surged 28.8 percent.
The average price paid for a vehicle in March was $34,342, up 1.7 percent from a year earlier, according to Kelley Blue Book.
But average incentives per vehicle soared 13.4 percent to $3,511, according to ALG, a firm that measures and monitors automotive residual and resale values, as automakers continue to pile on discounts to move sheet metal.
Despite the extra discounts, vehicle inventories at dealerships rose to the highest point since 2004, according to Edmunds. That reflects a softening market.
Here is a closer look at how the domestic automakers fared:
FORD
Ford sold 236,250 vehicles in March, a 7 percent decline compared with the same month a year ago. Ford's decline was mostly because of a 17 percent reduction in fleet sales and a tough comparison to last year when it had the highest amount of fleet sales for the year.
"So we were off 17 percent from a big number from a year ago," LaNeve said.
Ford's truck and SUV sales remain a bright spot for the automaker, which is in line with much of the industry.
Ford sold 81,330 F-Series pickups _ a 10 percent increase versus a year ago, with overall average transaction prices up more than $2,500.
GENERAL MOTORS
GM, which sold 256,224 new cars and trucks in March, was the only domestic automaker to report a gain.
The Detroit automaker's performance was driven by SUVs. At Buick, the automaker said crossovers are expected to account for more than 75 percent of retail deliveries in 2017, up from 66 percent in 2016. Buick's star performers include the Encore, Envision and Enclave SUVs.
At GMC, sales of the Acadia, which was redesigned in 2016, increased 84 percent in March, driving the brand's big increase for the month.
Chevrolet is still enjoying robust sales of its truck-based SUVs. Sales of the Chevrolet Tahoe increased 19 percent and sales of the Chevrolet Suburban rose 1.7 percent.
However, sales of the Chevrolet Silverado pickup fell 11.6 percent, contributing to a small decline for the automaker's largest brand.
Silverado also was outsold by Ram, which is a rare occurrence. The company sold 42,410 Silverados in March compared with 46,384 pickups sold by Ram, which has been using big incentives to lure in new buyers.
FIAT CHRYSLER
Fiat Chrysler's automaker's overall 5 percent drop was mostly caused by an 11 percent decline at Jeep, the automaker's largest brand.
Jeep sales have declined because the company has stopped making the Jeep Patriot and Jeep Compass and is in the process of launching an all-new Compass.
"The importance of Jeep was illustrated well in March," Krebs said. "When Jeep is down, Fiat Chrysler is down."
By brand, Fiat Chrysler's sales increased 1,191 percent for Alfa Romeo, 10 percent for Dodge, 6 percent for Ram and fell 5 percent for Fiat, 11 percent for Jeep and 33 percent for Chrysler.
Alfa Romeo is benefiting from the introduction of the Giulia sedan, the first model with mainstream appeal among premium luxury buyers. While Alfa Romeo has sold the 4C roadster for several years the Giulia, which went on sale in December, is marks the start of Alfa Romeo's true reintroduction into the U.S. The automaker sold 484 Giulia's in March.
