April Car Sales On Pace, Boosted by Record Rebates
Sales of new cars, trucks, SUVs, and vans in the United States are reasonably healthy through the first two weeks of this month, although flat demand has been propped up by record incentives, according to an update from J.D. Power and auto forecasting partner LMC Automotive. Total April auto sales (retail and fleet) are expected to reach 1.47 million units, up 1.8% from last April’s 1.5 million units, when adjusted for one less selling day this year (26 days in April 2017 vs. 27 days in April 2016).
Trucks and SUVs are the most popular choices, accounting for 61.8% of the retail new-vehicle sales mix in April, which marks 10 straight months of truck share above 60%. In addition, the incentive level has set another record for the month. According to the update, total incentive spending through April has climbed 13% from the same period in 2016.
Incentive spending per new vehicle through April 2017 amounts to an average $3,814, up $460 from a year ago. Trucks have required an average spend of $3,740 per unit, up $578 from last year, while incentive spend for cars is $3,938 per unit, an increase of $308.
In a breakdown of the sales mix, retail new car and light-truck deliveries in April are anticipated to reach nearly 1.17 million units, which represents a 1.3% improvement from the same month last year on a selling day-adjusted basis. Fleet sales are set to account for 20.8% of the total new-vehicle mix—up slightly from a 20.4% share in April 2016.
Commenting on the auto industry’s condition, Deirdre Borrego, senior vice president of automotive data and analytics at J.D. Power, said that nearly 30% of vehicles sold this year have remained on dealer lots for over 90 days, up from 27% in 2016. Yet, LMC Automotive’s Jeff Schuster, senior vice president of forecasting, said that the main reason for lower sales this year is lower fleet deliveries. Schuster said “there’s a lot of runway left” and many variables for the auto industry to consider—economic and policy factors remain important and other factors to consider include used-car pricing and leasing.