U.S. auto sales increased 3% in March over a year earlier, but warning signs emerged that car companies are stretching to keep demand humming after record results last year.
March’s selling pace came in at an adjusted annual rate of 16.57 million light vehicles, well below analyst expectations and the 17.5 million clip the industry reported in February. Detroit’s big three automakers each reported sales gains, but their results missed expectations, sending shares lower. Automakers overall sold 1.6 million light vehicles in March.
Automotive remains a coveted market for both steelmakers and aluminum smelters and the healthy price increase of 5.9% in our Automotive MMI reflects that. Automotive metals also got a boost from copper as the wiring metal also posted an increase this month, reversing a long flat streak.
Fiat Chrysler Automobiles said sales rose 8% to 213,187 vehicles in March. Ford Motor Co. sales rose 7.8% over a year earlier to 253,064 vehicles. General Motors’ sales edged up less than 1% to 252,128.
While those numbers might be cause for concern, long-term, they’re certainly not being felt in raw materials purchases by the Detroit automakers yet. Almost all of the component prices of our Automotive MMI were up in March and the phenomenon looks like it’s global with Chinese prices (mostly) joining U.S. and Korean ones in marching higher in lockstep.
The China Automobile Dealers Association said at its monthly news briefing that one-third of dealers it surveyed said demand increased in March, up from 2.7% in February, with the survey predicting stable demand this month.
Expect steel and aluminum companies to continue to aggressively court automotive customers, especially as new automobile technology, such as Tesla Motors‘ new, less-expensive sedan is rolled out.
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