DETROIT — U.S. light-vehicle deliveries, behind higher discounts, a surge in light-truck demand and an extra weekend of sales, rose 6.4 percent in March, topping expectations as the critical spring-selling season started off with a bang.
It is the industry's largest year-over-year increase since monthly volume rose 7 percent in Feb. 2016.
The March tally marked the auto industry's second gain of the year — a contrast to 2017, when the first monthly increase arrived in September.
The seasonally adjusted annualized sales rate came in at 17.49 million, well above most analysts' forecasts, and the seventh straight month the pace of sales has topped 17 million units. Overall, U.S. light-vehicle sales are now up 2 percent this year through February.
"Consumers are keeping the U.S. economy growing and auto sales very healthy," General Motors Co. Chief Economist Mustafa Mohatarem said. "The job market is strong, consumer confidence is at decade-high levels and we see clear evidence that business owners are taking advantage of tax reform to upgrade their fleets."
U.S. light-truck sales jumped 16 percent last month and rose 9.5 percent in the first quarter, while car demand slumped 8.9 percent in March and is off 11 percent in the first three months of the year.
Among major auto makers, General Motors, Fiat Chrysler Automobiles and Volkswagen Group set the pace with double-digit sales gains in March.
FCA, behind a 45-percent surge in Jeep deliveries, snapped an 18-month string of U.S. sales declines. FCA's 14 percent jump marked its first monthly advance since August 2016.
March sales rose 16 percent at General Motors, with each of the company's four brands posting double-digit increases. Honda Motor Co. advanced 3.8 percent. Ford Motor Co. and Toyota Motor Corp. were each up 3.5 percentwhile Nissan Motor Co. and Hyundai-Kia volume dropped.
In addition to strong Jeep sales that totaled nearly 100,000 units, Fiat Chrysler volume rose 15 percent at the Chrysler brand and 364 percent at Alfa Romeo, while sales slipped 13 percent at Ram, 1.8 percent at Dodge and 47 percent at Fiat.
Retail volume rose 11 percent to 162,304 vehicles, FCA said, with fleet accounting for 25 percent of deliveries last month.
At GM, sales rose 16 percent at Chevrolet, 11 percent at GMC, 28 percent at Buick and 13 percent at Cadillac. GM said retail deliveries rose 14 percent. The March figures will be GM's last sales report until July, following an announcement earlier Tuesday that it will now be reporting U.S. deliveries on a quarterly basis instead of monthly.
Ford's 3.5 percent advance — its first of the year — came on the strength of a 3.7 percent increase at the Ford division, as well as strong light-truck deliveries. Volume slipped 2.1 percent at Lincoln.
Toyota's March sales rose behind another strong month for truck sales, offsetting weak car shipments. Volume rose 4.5 percent at the Toyota division but slipped 3.2 percent at Lexus.
At Nissan Motor Co., volume slipped 3.7 percent, with sales off 3.6 percent at Nissan and 4.6 percent at Infiniti.
Honda Motor said volume rose 2.6 percent at the Honda brand and 16 percent at Acura, with overall light-truck shipments rising 7 percent and car demand up 0.4 percent.
Strong demand for new and redesigned crossovers helped the Volkswagen brand chalk up an 18 percent gain in March volume. Sales rose 22 percent at Mitsubishi, 2.5 percent at Kia, 5.9 percent at Subaru and 36 percent at Mazda but dropped 11 percent at the Hyundai brand and 9.1 percent at Mini.
Among other luxury brands, volume rose 54 percent at Volvo, 6.2 percent at Porsche, 1 percent at BMW, 38 percent at Land Rover and 7.4 percent at Audi but deliveries dropped 34 percent at Jaguar.
Sales continue to be driven by high incentives and demand for light trucks, notably crossovers, while car volumes remain weak and auto makers shy away from deliveries to fleets. Moderate gasoline prices as well as steady job gains are supporting industry sales, auto makers and analysts say, even as an era of cheap credit wanes.
"Interest rates are rising as expected and we are looking for a total of four rate hikes in 2018, a headwind making borrowing more expensive and raising monthly payments," said Jeff Schuster, head of forecasting at LMC Automotive.
Edmunds said average interest rates on new vehicle loans hit their highest level since 2009 in March, marking the second straight month of sharp rate increases. The annual percentage rate on new financed vehicles averaged 5.7 percent in March—compared to an average of 5.2 percent in February and 5 percent in January.
The shift to crossovers, SUVs and pickups continues to propel average new transaction prices higher.
Kelley Blue Book estimates the average transaction price for a new light vehicle in the United States was $35,285 in March. That's up 2 percent, or $703, from March 2017 but $23 lower than February.
The U.S. new-vehicle market, after seven straight annual gains capped by a record 2016, dropped 1.8 percent to 17.245 million units last year. Overall, U.S. sales are forecast to drop below 17 million for the first time in three years, with most 2018 estimates from analysts ranging from 16.7 million to 16.9 million units.