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The next steps automakers could take after sales drop again in April

DETROIT (Reuters) - Major automakers on Tuesday posted declines in U.S. new vehicle sales for April in a sign the long boom cycle that lifted the American auto industry to record sales last year is losing steam, sending carmaker stocks down. The drop in sales versus April 2016 came on the heels of a disappointing March, which automakers had shrugged off as just a bad month. But two straight weak months has heightened Wall Street worries the cyclical industry is on a downward swing after a nearly uninterrupted boom since the Great Recession's end in 2010. Auto sales were a drag on U.S. first-quarter gross domestic product, with the economy growing at an annual rate of just 0.7 percent according to an advance estimate published by the Commerce Department last Friday. Excluding the auto sector the GDP growth rate would have been 1.2 percent. Industry consultant Autodata put the industry's seasonally adjusted annualized rate of sales at 16.88 million units for April, below the average of 17.2 million units predicted by analysts polled by Reuters. General Motors Co shares fell 2.9 percent while Ford Motor Co slid 4.3 percent and Fiat Chrysler Automobiles NV's U.S.-traded shares tumbled 4.2 percent. The U.S. auto industry faces multiple challenges. Sales are slipping and vehicle inventory levels have risen even as carmakers have hiked discounts to lure customers. A flood of used vehicles from the boom cycle are increasingly competing with new cars. The question for automakers: How much and for how long to curtail production this summer, which will result in worker layoffs? To bring down stocks of unsold vehicles, the Detroit automakers need to cut production, and offer more discounts without creating "an incentives war," said Mark Wakefield, head of the North American automotive practice for AlixPartners in Southfield, Michigan. "We see multiple weeks (of production) being taken out on the car side," he said, "and some softness on the truck side." Rival automakers will be watching each other to see if one is cutting prices to gain market share from another, he said, instead of just clearing inventory. INVESTORS DIGEST BAD NEWS Just last week GM reported a record first-quarter profit, but that had almost zero impact on the automaker's stock. The iconic carmaker, whose own interest was once conflated with that of America's, has slipped behind luxury carmaker Tesla Inc in terms of valuation.

2014 Toyota Highlander recalled over seatbelt anchors

Toyota has announced a small recall of its redesigned, 2014 Highlander over issues with one of its seat belts. The affected vehicles, which were built from November 20, 2013 to January 18, 2014, could have a seatbelt assembly in the middle seat of the third row that wasn't properly secured to a floor anchorage at the factory.
In total, 7,067 of the new Highlanders are included in the recall, which was discovered not after a crash, but during a post-build inspection at the factory. It's unclear if there have been any injuries as a result of the faulty seat belts.
Toyota is set to inform owners of the affected vehicles as well as dealers with the recalled Highlander models in their inventory. Naturally, repairs will be performed free of charge. For the full bulletin form the National Highway Traffic Safety Administration, scroll down.

VW Finds CO2 'Irregularites', SEMA Recap, and More | Autoblog Minute

Volkswagen's diesel emissions scandal gets a new wrinkle, US regulators hit Takata Corporation with a substantial fine, and we head to Vegas for a look at tuner paradise at the 2015 SEMA show. Autoblog Senior Editor Greg Migliore reports on this edition of Autoblog Minute Weekly Recap. Acura Chevrolet Honda Mazda Mitsubishi Toyota Autoblog Minute Videos Original Video Acura Legend