DETROIT (Reuters) - Detroit automakers reported another month of strong demand from U.S. consumers for trucks and sport utility vehicles on Tuesday, but their shares dropped as analysts focused on signs the world’s second-largest auto market has little room to grow.
U.S. light vehicle sales in April totaled 1.51 million, up 3.6 percent from a year earlier, for a seasonally adjusted annualized rate of 17.42 million vehicles, according to Autodata Corp. WardsAuto said annualized sales were 17.32 million vehicles.
U.S. auto sales in 2015 hit a record 17.4 million vehicles.
Wall Street analysts say the U.S. auto market is close to a cyclical peak and that more production cuts, which hurt profit, could be needed to keep inventories of vehicles from ballooning later in the year.
“We continue to believe sales growth will be muted this year,” Joseph Spak of RBC Capital said in a note to investors.
Inventory data issued early on Tuesday pointed to some possible “risk to North American production over the coming months,” Spak added.
The sluggish pace of U.S. economic growth adds to concerns that the auto industry recovery could run out of fuel.
April auto sales in Canada were the highest for any month on record, at 200,327 vehicles, consultant Dennis DesRosiers said. Ford, Fiat Chrysler and Toyota all reported double-digit gains in Canada.
Shares of General Motors Co GM.N and Ford Motor Co F.N closed down 1.6 percent and 1.4 percent, respectively, as the broader market also declined, while Fiat Chrysler Automobiles NV FCHA.MI FCAU.N shares fell 3 percent to $7.96.
GM and Ford said sales to individual consumers were still growing. But because GM has been cutting back on low-profit sales to rental car companies and other fleets, its overall April U.S. sales fell by 3.5 per cent.
GM’s results were among many that highlighted a divide in the market between slumping sales of traditional sedans, and robust demand for pickup trucks and SUVs.
GM said sales of the Chevrolet Silverado pickup truck rose nearly 9 percent in April compared with a year earlier. However, sales of GM’s Cadillac CTS and ATS luxury sedans plummeted 23 percent and 18 percent, respectively.
Other luxury brands also had weak results in April, especially for cars. Toyota Motor Corp’s 7203.T Lexus division suffered a 26 percent decline in sales of cars such as the large LS sedan, although sales of Lexus brand SUVs rose 20 percent.
German luxury car maker BMW AG BMWG.DE said sales of its BMW brand passenger cars fell 6.5 percent, while its SUV sales fell 9.7 percent.
The chief executives of two leading auto dealer groups, AutoNation Inc AN.N and Group 1 Automotive GPI.N, had warned in April that automakers should start curbing production, particularly of slow-selling luxury sedans.
Still, April U.S. sales for Ford, Honda Motor Co 7267.T and Nissan Motor Co 7201.T all beat analysts’ expectations. Ford’s sales rose 4 percent from a year earlier, Fiat Chrysler Automobiles was up 5.6 percent and Toyota Motor Corp 7203.T, No. 3 in the U.S. market, rose 3.8 percent. Honda sales rose 14.4 percent.
Editing by Tom Brown and Matthew Lewis