IRVINE, Calif. — New-vehicle sales are expected to increase 3% year over year to 1.63 million units retailed in March 2017, resulting in an estimated 17.4 million seasonally adjusted annual rate (SAAR), according to Kelley Blue Book. There were 27 selling days in March, the same as last year.

If the vehicle valuation site is correct, March’s sales total brings first quarter total to 4.1 million units, a slight 0.3% year-over-year increase. This would also be the second highest first quarter on record, surpassed only by the first quarter of 2000, when the industry sold 1.66 million units.

“Kelley Blue Book expects manufacturers to report mostly positive sales numbers this month, capping a steady first quarter with an average SAAR of 17.4 million,” said Tim Fleming, analyst for Kelley Blue Book. “Despite considerably higher discounts and incentives, first quarter sales totals will likely only finish flat versus last year, a signal of weakening consumer demand for new vehicles. 

“As sales cool after years of robust growth, adjusting production accordingly and managing supply, especially in car segments, should be top priorities for automakers,” Fleming added.

After record sales in 2016 and seven consecutive year-over-year sales increases, Kelley Blue Book’s forecast for 2017 calls for sales in the range of 16.8 million to 17.3 million units, a 1% to 4% decrease from last year.

General Motors: General Motors is expected to gain the most market share this month, up nearly a full percentage point.  In particular, the automaker’s SUV lineup could grow sales by 25%, led by three all-new models introduced last year, including the Chevrolet Equinox, Buick Envision and GMC Acadia. GM trucks, especially the Silverado, could have a strong month as well, with sales likely growing 10% on heavier incentives.

Ford Motor Co.: The automaker could post the greatest sales declines of all major manufacturers; although a large drop in fleet volume is responsible. Retail sales should be flat or slightly up. As a result, Fusion and Focus could report declines of more than 20% in March 2017. Similarly, Transit and other Ford vans, which are popular in commercial fleets, could fall 20%.

Shift Toward Cars: The significant shift from cars to SUVs shows no sign of slowing, with double-digit growth projected for the popular compact and mid-size SUV/crossover segments. This month, analysts expect an overall light truck mix of 63%, up from 58% last March.

“Mid-size cars continue to suffer as a result of shifting consumer preference toward utility vehicles, and Kelley Blue Book anticipates the segment will lose nearly 3 percentage points of market share,” said Fleming. “This segment, which was the top-selling category in the industry as recently as 2013, is in a rapid decline, which does not bode well for the upcoming redesigns for the Toyota Camry and Honda Accord, due later this year.”

Originally posted on F&I and Showroom