Industry analysts are pumping up April 2016 to be the best April in history for car sales. Some analysts expect record sales for the entire year.
“Cheap credit, low gas prices and rising consumer confidence help drive more buyers to showrooms,” says the Wall Street journal in its report U.S. Auto Sales Back on Track in April.
Analysts forecast industry-wide sales will rise 5% in April to set a new monthly high and the selling pace will eclipse 17.5-million vehicles, putting the auto industry back on track to beat last year’s sales record.
Fiat Chrysler Automobiles NV on Tuesday posted a 5.6% rise in April sales, driven by continued demand for its Jeep brand. It was the Italian-U.S. auto maker’s best April in 11 years as Jeep brand sales climbed 17% for their best April yet, with the Renegade and Compass logging their best monthly sales ever.
Ford Motor Co. logged 3.6% growth to 229,739 light vehicles sold in the month. Ford brand SUVs saw their best April sales ever, while F-series pickups passed the 70,000 mark for a second month.
General Motors Co.’s U.S. sales fell 3.5% in the month due to a pullback on fleet business. Retail sales rose 3.3%, helped by stronger sales at its Buick, GMC and Chevrolet brands.
“Following a disappointing March, we expect sales to get back on track in April,” said Kelley Blue Book analyst Tim Fleming.
Car makers benefited from an extra selling day in April, as well as the Easter holiday falling in March, giving them five full weekends of sales. Typically, new-car sales start to pick up in the spring when there is better weather and longer days.
Year for the History Books
Detroit News notes GM down 3.5%; FCA, Ford Report Modest Gains in Sales.
Overall, automakers on Tuesday are expected to report the best-ever April for vehicle sales in the United States, adding fuel to the fire for another record-breaking year.
Analysts anticipate the industry to have sold more than 1.51 million car and trucks last month, a roughly 4 percent increase from a year ago that would top the April sales record of just over 1.5 million in 2005.
“Even though Q1 ended with a relatively lackluster March, the industry still as strong as ever, and this month’s sales will only reinforce that strength,” said Jessica Caldwell, Edmunds.com director of industry analysis. “Considering that April is typically the calm before the storm of summer sales, there’s every reason to believe that 2016 will be a year for the history books.”
Both Edmunds.com and KBB expected GM and Volkswagen Group to be the only major automakers to lose sales compared to a year ago, with single-digit losses.
Bloomberg Econoday reports on Motor Vehicle Sales.
The Big Three are out and North American-made vehicle sales for April are running a little higher than March, at a 13.5 million annualized rate vs 13.3 million. Car sales are flat but not truck sales which are up on the month. These preliminary data hint at a gain for the motor vehicle component of the April retail sales, which last posted an increase all the way back in November. Foreign brands will post their April results through the session.
Motor vehicle sales have been a central weakness of the economy so far this year, pulling down retail sales and pulling down factory output in turn. But strength is expected for April where forecasters are calling for a 17.3 million annualized rate, well up from the big disappointment of March’s 16.6 million rate.
Unit sales of motor vehicles include domestic sales and foreign sales, otherwise referred to as imports. Domestics are sales of autos produced in the U.S., Canada, and Mexico. Imports are U.S. sales of vehicles produced elsewhere. These are for light vehicles which include all passenger cars and light trucks up to 14,000 pounds gross weight (including minivans and sport utility vehicles). Individual manufacturers usually report sales on the first business day of the month. One of the first tabulators of the data is Autodata Corporation. Motor vehicle sales are good indicators of trends in consumer spending and often are considered a leading indicator at business cycle turning points. One should note that manufacturers do not break out vehicle sales to businesses, which are a smaller but still significant percentage of the monthly total.
Motor Vehicle Sales
“North American-made vehicle sales for April are running a little higher than March, at a 13.5 million annualized rate vs 13.3 million.”
Given that April had five full weekends, an extra selling day, and Easter came in March, is a 0.2% pickup over March for the big three such an amazing feat?
If strength of sales is based on imports, it will subtract from GDP.
Mike “Mish” Shedlock