Japanese makers, in particular, appear to be having a very good month. But incentives for products like the Toyota Camry have also ramped up.
Final sales figures for April aren’t due out until next week but expectations are building for another month of automotive market momentum.
Light vehicle sales in the U.S., including fleet, are expected to reach 1.2 million units for the month, up 3.4% from April 2011, according to a forecast from True Car.com, an online data information center. That would work out to another month in which the Seasonally Adjusted Annualized Rate or SAAR will exceed 14 million units – notably ahead of most forecasts going into 2012.
With other indicators providing mixed signals, analysts see the steady growth of the U.S. automotive market as a critical to the nation’s economic recovery.
While forecasts for April vary, TrueCar – which relies on data provided by a national network of dealers – expects the SAAR to reach 14.6 million for the month, up from 13.2 million in April 2011 and 14.4 million in March 2012. Fleet and rental sales are expected to make up 18% of total industry sales in April 2012, TrueCar estimated in its forecast.
The California-based firm’s optimism was echoed elsewhere.
“The daily selling rate in April is projected at 37,000 units, which is higher than the 34,000-unit average in the first quarter,” said John Humphrey, senior vice president of global automotive operations at J.D.
Power and Associates, which also track consumer activity across the auto industry.
“While April is typically a challenging month to draw comparisons with because the Easter holiday some years falls in April and other years in March, the signs of sustained growth are evident,” Humphrey said.
Another positive sign is that the industry average incentive spending per unit will be approximately $2,446 in April 2012, which represents a decrease of 4.7% from March 2012 – though an increase of 5.6% from April 2011, TrueCar forecast.
Used car sales are estimated to be 3,615,148, down 2% from April 2011 but up 33.6.% from March 2012. The ratio of new to used is estimated to be 1 to 3 for April 2012.
“The momentum built by the recovering economy and compelling product choices in the first quarter continued to fuel new vehicle sales in April, ” said Jesse Toprak, Vice President of Market Intelligence for
TrueCar.com. “Consumer demand for the smaller, fuel-efficient vehicles remains strong while the SUV and truck categories are not seeing any dramatic drop in sales – thanks to the introduction of several new models that offer significantly better fuel economy,” he said.
Toprak said TrueCar expects Chrysler to report increased sales for the month of April but Ford Motor Co. and General Motors might see their sales drop slightly because of renewed competition from Honda and
Toyota.
Those makers saw their own volumes collapse in April 2011 following the devastating earthquake and tsunami that all but shut down the Japanese auto industry. Most Japanese manufacturers have only begun to reach normal production and inventory levels in recent months, so April could mark a significant upturn on a year-over-year basis.
“Toyota has fully recovered from inventory shortages caused by last year’s earthquake and tsunami and has recouped most of its lost market share in April,” said Kristen Andersson, Senior Analyst at TrueCar.com. “The automaker will post their highest market share since December 2010 led by sales of fuel efficient vehicles like the Camry, Prius, and Corolla.”
On the other hand, both Toyota and Honda also have increased their spending on incentives in a bid to win back market share they lost last year, she added.