Car sales slump dings Toyota

Toyota Motor's U.S. sales slumped 1.1% in the first quarter of 2016 — and 2.7% in March — as the industry's small-car slump took a toll on a company that's historically strong in that segment.

The Japanese automaker's namesake Toyota brand recorded a 2.7% decline in March to 189,644 units, while the Lexus luxury brand fell 2.8% to 30,198 units.

The overall performance trailed Edmunds.com analyst expectations of 6.5% sales growth in March and Kelley Blue Book expectations of 5.8% growth.

"March has shown a little bit of softness due to consumers being a little more cautious about spending but they’re still spending," said Bill Fay, group vice president and general manager of the Toyota division, in a conference call. "The economy still feels stable and fundamentals for consumer spending remain strong."

The auto industry is benefiting as consumers rush into crossovers, pickups and sport-utility vehicles, which are more profitable than cars — and Toyota is no exception.

The company's Toyota brand crossovers, pickups and SUVs rose 5.1% in March and 6.4% for the quarter. But Toyota brand cars fell 9.6% in March and 7.9% for the quarter, reflecting the structural shift that analysts attribute to lower gas prices.

Even as it celebrates its 50th anniversary this year, the Toyota Corolla compact sedan is down 7.1% for the year. And the Camry mid-size sedan, another stalwart of Toyota's lineup, is down 4.2% for the year.

But concurrently the RAV4 crossover is up 13.6% and the Highlander SUV is up 9.4%.

"We're selling them virtually as fast as we can build them," Fay said of non-cars.

Follow Paste BN reporter Nathan Bomey on Twitter @NathanBomey.