Carmakers battle for US buyers as sales weaken

Carmakers launched fresh efforts to boost profitability in the US on the first day of the New York auto show, as March sales figures showed price increases helped depress volumes.

The auto show produced an array of premium product introductions, including General Motors' Cadillac CT6, its luxury brand's first attempt in decades to compete head-on with the highest-end offerings from Mercedes-Benz and BMW.

Ford's luxury brand, Lincoln, re-entered the premium, full-size sedan market with the Continental concept car.

The show kicked off as figures showed that new US car sales for many manufacturers either marginally declined or rose only slightly in March because of a combination of harsh weather, tough comparisons with last year and a 3 per cent increase in average prices.

Profits in the US have become critical to many carmakers after a series of other important markets worldwide - including Europe, Russia and South America - suffered downturns. Luxury vehicles and sports-utility vehicles - which will both feature strongly at the annual New York show - are disproportionately profitable for carmakers. GM and Ford, the US's two biggest carmakers by sales, want to improve profitability, in part by moving upmarket.

Michelle Krebs, an analyst at autotrader.com, the car information site, said the sales were still strong by historical standards. The slowdown partly reflected last March's rebound in sales after severe weather in January and February and bad weather in many places this March.

This March also had one fewer weekend, the most important time for selling vehicles. This will affect the calculation of the month's seasonally-adjusted annual rate of sales (Saar), which is expected to increase 3.7 per cent on last March to around 16.9m vehicles.

The average price of a vehicle sold in the US this March was 3 per cent higher - at $33,280 - than last March, said Ms Krebs.

"That indicates a strong market," she said.

As well as the US manufacturers' introductions on Wednesday, Germany's Daimler introduced a new Mercedes SUV - the GLE - and Toyota's Lexus luxury brand introduced a new version of its popular RX.

Jessica Caldwell, an analyst for Edmunds.com, said the US's sustained high sales levels made it attractive to manufacturers worldwide.

"This market has grown fairly well and now it's sustaining those levels," she said. "This is a good market to come into."

GM's overall new vehicle sales declined 2 per cent year-on-year, although pick up trucks, vans and SUVs were up 14 per cent. Ford's sales were 3.4 per cent down on last March, while US sales for FiatChrysler rose 2 per cent.

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