FCA, GM sales decline in 2019 amid increasing incentives, fleets

Sales are likely to top 17 million vehicles in the United States for an unprecedented fifth consecutive year, as incentives increased and often-discounted fleet sales rose.

But major automakers including Fiat Chrysler Automobiles NV and General Motors Co. on Monday still reported declining sales as peak demand in 2016 continues to retreat and they slash smaller vehicles from their lineups.

Analysts predict a 1-2% decrease from 2018's 17.2 million vehicle sales, less than initially forecasted as a robust economy kept consumer confidence high, despite uncertainty about tariffs and trade.

"Things don't truly perpetually grow," said Stephanie Brinley, an analyst at IHS Markit. "Consumers spending has been pretty resilient to the conditions around trade ... and there's plenty of deals out there."

The United Auto Workers' 40-day national strike against GM led to leaner sales during the fourth quarter, the company said, with sales down 6.3% in the fourth quarter and 2.3% for the full year. GM lost 300,000 units of production during the strike, costing it $3 billion, the company previously said.

Fiat Chrysler's U.S. sales fell 1% in 2019, with sales off 2% year-over-year in the fourth quarter. Ford Motor Co. is scheduled to report sales numbers Monday.

Automakers are expected to balance their natural sales with "synthetic sales" — those garnered from heavy incentives or to rental fleets to make up for the natural erosion of sales, said Karl Brauer, executive publisher at Kelley Blue Book.

"It is just going to keep getting tougher," he said.

Increasing prices also are decreasing demand for new vehicles. Average transaction prices for light vehicles in the United States rose to $38,948 in December, up nearly 2% year-over-year, according to Kelley Blue Book. But as retail demand fell over the year, dealer discounts grew and neared 7% of list prices in December — the highest since July 2009.

Meanwhile, fleet sales were up in 2019, too, accounting for 22.7% of Fiat Chrysler's total sales and 21.8% of GM's. 

Analysts predict sales will continue to fall in 2020 to hundreds of thousands of units below 17 million, which could pressure automakers into leaning on these tools.

"What this means for the market is an intensely competitive environment, with consumers in the driver’s seat," Brinley said. "Automakers need to maintain discipline in incentives and sales, while also finding a way to stand out in the market and be considered."

GM said the UAW strike, which went from mid-September until the end of October, led to North American wholesale deliveries declining about 25% compared to the same period last year. That includes the company’s newly launched heavy-duty full-size pickups, which were off about 17%.

“Our fourth-quarter stocks were leaner than we wanted, but as we get ready to launch our all-new full-size SUVs, we look forward to another solid year in 2020,” Kurt McNeil, GM's vice president of U.S. sales operations, said in a statement.

GM also has cut smaller, less profitable vehicles from its offerings, including the Chevrolet Cruze, whose sales fell 91.8% in the fourth quarter.

Profit-heavy pickups drove the business for both automakers in 2019. The Ram truck brand had its best year ever since becoming a standalone brand in 2009 with an 18% increase in sales and a record fourth quarter with a 6% increase in vehicles sold.

Overall, GM sold 2,887,046 vehicles in the U.S. in 2019, down from 2,954,037 sales in 2018. Fourth-quarter sales of 735,909 did not beat analyst expectations. Its stock closed down 1.9% Friday.

Fiat Chrysler's total U.S. sales were 2,203,663 for the year, down from 2,235,204. In the fourth quarter, the Italian-American automaker posted 542,519 sales, surpassing analyst expectations. Shares, however, closed down 3.5% Friday.

All other FCA brands fell for the year and the quarter: Jeep was down 5% overall and 2% for the fourth quarter, Chrysler fell 23% overall and 15% for the quarter, and Dodge fell 8% overall and 9% for the quarter. Fiat, which has ended production of the Fiat 500 minicar in North America, fell 41% for the year and 49% for the quarter. Alfa Romeo was down 23% overall for the year and 12% for the quarter.

The Jeep Grand Cherokee SUV posted a record year, up 8% from 2018. The Jeep Wrangler compact SUV had its best fourth quarter, up 6% year over year.

At GM, Buick was flat for the year and down 4.3% for the fourth quarter. Cadillac was up 1% overall and down 2.2% for the quarter. Chevrolet was down 3.8% overall and 6.1% for the quarter. GMC rose 1.5% for 2019 and fell 8.5% in the quarter.

GM's crossovers achieved yearly records in the compact, small and small luxury segments. Crossover deliveries were up 12.7% from 2018.

"The trend of utility vehicles replacing sedans as family cars did not slow in 2019, though SUV segments continue to get more crowded," Brinley said. "New customers may take more effort to find and win over."

Meanwhile, Toyota Motor Corp.'s U.S. sales fell in December, bringing year-long sales down 1.8% from 2018. Nissan Motor Co.'s sales plunged 30% in December, bringing deliveries down 9.9% for the year.

But not all automakers posted negative results: Although U.S. sales in December decreased at Honda Motor Co. Ltd. and Hyundai Motor Co., full-year sales were up 0.2% and 3.2% respectively. Volkswagen AG's sales fell 13% in December but rose 2.6% overall.

In 2019, the all-electric Tesla Inc. increased its deliveries more than 50% from the previous year to about 367,500 vehicles as it increased production of its Model 3 sedan.

"I think that 2019 was a story of SUVs continuing their growth," said Jeremy Acevedo, senior manager for insights at auto industry information website Edmunds.com Inc. "It was also a story of pickup trucks. Overall, it seems like a strong year. We should take this momentum into 2020."

bnoble@detroitnews.com

khall@detroitnews.com

Twitter: @BreanaCNoble, @bykaleahall