Vehicle Sales Are Up Thanks to Heavy Discounts in March
After three months of sales decreases to start off 2018, the automotive industry is expecting to see a slight rise in sales for the month of March. However, that surge isn’t likely to stick around for too long. Automotive sales have seen an increase over the last month in part thanks to steep discounts offered by dealerships.
The month of March had an extra weekend this year, giving sales a bit of a boost. But the main increase in sales seems to have come from discounts at the hands of dealerships. Analysts report that vehicles like the Ford F-150 are seeing steep discounts to face the competition, and GM trucks are slashing prices in an effort to clear out their inventory and make room for redesigned 2019 models. When compared to this time last year, the average discount per vehicle rose by $74.
In the grand scheme of things, projections put the seasonally-adjustable annualized rate at 16.9 million vehicles for March, compared to 16.8 million vehicles in March 2017.
However refreshing this rise in sales may seem, it doesn’t seem like it will last for very long. Interest rates are rising at a rapid pace, raising car payments left and right. “Interest rates are rising as expected,” said Jeff Schuster, senior vice president of forecasting at LMC Automotive. “We are looking for a total of four rate hikes in 2018, a headwind making borrowing more expensive and raising monthly payments.”
LMC’s current predictions put 2018 vehicle sales in the United States just shy of 17 million. Official sales reports for March will be released on April 3.