U.S. sales slip in April; SAAR remains healthy

UPDATED: 5/1/18 4:48 pm ET

U.S. auto sales fell about 4.8 percent in April on weaker car and fleet volume, but the pace of sales remained strong as the spring selling season continued to unfold with some gusto.

The seasonally adjusted annualized sales rate for April came in at 17.15 million, Autodata Corp. estimated, marking the eighth straight month the pace of U.S. sales has topped 17 million.

Overall, seven automakers reported increases -- all of them in the single-digit range with the exception of Volvo’s 17 percent jump. Similarly, most of the biggest automakers recorded single-digit declines, with the exception of Nissan’s 28 percent drop.

With April in the books, U.S. sales of new cars and light trucks are now up an estimated 0.2 percent for the year.

GM and the asterisks

Figures for the April SAAR and industry total are estimated because General Motors stopped reporting monthly sales starting today.

The company’s U.S. sales fell 2.5 percent to 3 percent in April, Bloomberg reported, citing people familiar with the matter. The Automotive News Data Center split the difference in calculating a 2.7 percent decline for GM and 237,900 total sales.

GM is now reporting on a quarterly basis, contending that in sharing information less frequently it will deliver a more-meaningful portrait of its performance.

April was one of those asterisk-rich months cited by critics of monthly sales reports. It had two fewer selling days and one fewer weekend than April 2017.

Company by company

Jeep propelled FCA US to its second monthly gain in a row – up 4.5 percent -- after 18 straight declines.

Sales at Jeep rose 20 percent to 82,641 -- an April record for the brand -- while deliveries slipped 9 percent at Ram, 18 percent at Chrysler and 45 percent at Fiat.

Dodge, behind higher Journey and Caravan deliveries, broke a string of 10 straight monthly declines with a gain of 3.9 percent. FCA said retail sales last month slipped 1 percent to 143,995, while fleet accounted for 22 percent of overall deliveries.

The Volkswagen brand also reported a gain, rising 4.5 percent for its fourth advance of the year. The new Atlas and redesigned Tiguan crossover accounted for 45 percent of VW’s volume.

At Ford Motor Co., volume dropped 4.5 percent behind lower car and crossover/SUV demand. Sales fell 4.1 percent at the Ford division and 12 percent at Lincoln.

Ford said April car deliveries slipped 15 percent and utility sales dropped 4.6 percent, while trucks edged up 0.9 percent.

Because of the timing of orders, April fleet shipments fell 8.6 percent to 67,602, Ford said.

Ford also said that it would not follow GM in switching to quarterly U.S. sales reports.

"We've decided we're going to continue monthly, sales chief Mark LaNeve said in a call with reporters and analysts. “We think that's best for us right now."

Nissan Motor Co. sales, behind broad declines in car and truck volume, fell 28 percent on a 29 percent drop at the Nissan brand and 17 percent at Infiniti. Nissan brand car sales slumped 35 percent and light-truck deliveries slipped 23 percent, the company reported.

Volume dropped 11 percent at the Hyundai brand. Subaru's U.S. sales continued to rise, advancing 1.5 percent. Kia posted a 5.2 percent drop, and Mazda declined 4.6 percent. At Mini, deliveries rose 7.2 percent.

Among luxury brands, sales rose 3.8 percent at BMW, 2.1 percent at Audi, 0.7 percent at Porsche, 24 percent at Land Rover and 17 percent at Volvo. But demand fell 38 percent at Jaguar and 27 percent at Genesis.

Market factors

Sales continue to be driven by healthy light-truck demand -- notably crossovers -- while car volume continues to weaken. Low but rising finance rates, moderate but rising gasoline prices as well as steady job gains are supporting industry sales, automakers and analysts say.

The shift to crossovers, SUVs and pickups continues to lift transaction prices. The average new-vehicle retail transaction price for April was tracking at $32,544, a record for the month, surpassing the previous high of $31,414 set in April 2017, J.D. Power says. ALG estimates the average transaction price for a new light vehicle was $33,515 in April, up 2.7 percent from a year ago.

Company outlook

Ahead of Tuesday’s sales reports, April deliveries were projected by analysts polled by Bloomberg to fall at every major automaker. Volume was forecast to drop 2.9 percent at GM, 5 percent at Ford, 1.4 percent at FCA US, 6.1 percent at Toyota Motor, 7.3 percent at Honda Motor, 9.7 percent at Nissan Motor, 11 percent at Hyundai-Kia and 1.8 percent at VW-Audi.

Spiffs

The average new-vehicle incentive was tracking at $3,698 in the first three weeks of April, J.D. Power says, up $187 from a year ago. The spending increase continues to be driven by trucks and SUVs — up $426 — while average spending on cars is down $226. ALG estimates average new-vehicle incentives rose 8.5 percent to $3,736 last month compared with April 2017, with the Detroit 3 among the biggest average spenders on deals.

Odds & Ends

There were 24 selling days last month vs. 26 in April 2017 … Edmunds says the average monthly payment on a new vehicle averaged $535 in April compared to $509 in April 2017 and $463 in April 2013. The average amount financed increased to $31,318 in April compared to $30,315 last year and $26,679 in April of 2013. Down payments also increased, reaching $3,911 in April, compared to $3,770 in 2017 and $3,494 in 2013 ... J.D. Power says days to turn, the average number of days a new vehicle sits on a dealership lot before being sold to a retail customer, was 68 through April 18, down 2 days from the same period in April 2017 … Light trucks accounted for 67 percent of U.S. light-vehicle deliveries in the first three weeks of the month, the highest level ever recorded in April, J.D. Power says … Kelley Blue Book says the shift to light trucks is driving gains in estimated average transaction price for light vehicles -- $35,411 in April. New-vehicle prices increased by $710, up 2 percent, from April 2017, but down $99, or 0.3 percent, from March ... Incentives, expressed as a percentage of sticker price, stood at 10.3 percent in early March, matching or exceeding the 10 percent threshold for the 20th time over the last 21 months, J.D. Power says.

Quotables

“March benefited from an extra weekend this year, while April sales have been negatively affected by having one less selling weekend compared to 2017. When looking at the two months combined, retail sales will be down only modestly from last year.”

-- Thomas King, J.D. Power.

“The sales rate has been at or above 17 million since last August, suggesting the vehicle market is on sound footing. Along with positive economic news, buying conditions remain strong with robust credit availability and aggressive … vehicle incentives, and these conditions are expected to remain through much of 2018. In addition, overall sales volumes have been supported by notable fleet activity, which is running above last year’s rate.”

-- Charlie Chesbrough, Cox Automotive

“The auto industry is resilient and disciplined. It’s shrugged off most of the concerns to date. Going forward, it wouldn’t take much to turn delicate stability into more pronounced pullback. Keep an eye on the economy after 2018, as signals are increasing that a mild recession could be on the horizon.”

-- Jeff Schuster, LMC Automotive