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Warning Signs Evident in April New Car Sales Numbers

Warning Signs Evident in April New Car Sales Numbers

By Jeff Youngs, May 06, 2014
Though new car sales in April 2014 notched another year-over-year gain compared with the same month in 2013, there are warning signs within the data, and not just because the selling-day-adjusted sales figure represents a 9.5% decline compared with March 2014.

Nevertheless, analysts are expecting that automakers will sell more than 16 million new cars, trucks, and SUVs this year, continuing an overall auto industry recovery. Year-over-year sales tracked by J.D. Power and LMC Automotive appear to support that position: Total April 2014 sales came to 1,388,167, an increase of 3.8% compared with April 2013.

Highlights: April 2014 Car Sales
In an interview with Automotive News, Steven Szakaly, chief economist for the National Automobile Dealers Association, explained that low interest rates, reduced unemployment, an improving housing sector, and many new and redesigned models continue to make buying a new vehicle appealing to consumers. "The broader economy is very strong," said Szakaly.

Barclays analyst Brian Johnson took a slightly different view in discussing new-vehicle sales with Automotive News, claiming that the global financial services firm believes that "underlying demand has normalized" in terms of consumer appetite for buying a new vehicle.

Trucks led cars in terms of sales gains, 13% compared with 3%, respectively. Automotive News also reports that the most significant improvements in sales came from the subcompact car, small luxury car, luxury crossover, and SUV segments. Jeff Bracken, general manager of Lexus, told the industry trade journal that the luxury market has expanded faster than overall light-vehicle sales, fueling a 28% year-over-year increase for Lexus.

Strong performance of luxury brands juxtaposed against higher incentives, longer car loan terms, and resurgent popularity of small cars could signal a rift in the market. Data from TrueCar appears to support that position, the new-car buying service noting that April incentives were, on average, 9% higher than in the same month in 2013. "It seems like automakers are going to keep juicing the market this year," Larry Dominque, executive vice president of TrueCar, said to Automotive News.

Following are the April 2014 sales results for each major automaker, presented in alphabetical order by manufacturer group:

American Honda--Honda sales remained essentially flat, rising 1% compared with April 2013. Acura is outperforming Honda in terms of sales improvement.

BMW Group--Mini remains a drag on BMW Group sales, declining 24% compared with April 2013. Core BMW brand sales rose 9%, trailing rival Mercedes-Benz.

Chrysler Group--Chrysler Group continued its now 49-month-long sales-gain streak, increasing sales 14% over April of last year. Jeep, Ram, and Fiat all enjoyed double-digit gains, while Chrysler brand fell 21%. With sales of 59,754 units, Jeep had its best month ever and eclipsed Dodge as the company's most popular nameplate.

Daimler AG--Smart was the second most improved brand during the month of April, enjoying a 57% increase in sales compared with April 2013. Mercedes-Benz posted an 11% increase, bringing Daimler AG sales to a 12% month-over-month increase.

Ford Motor Company--Strong F-Series, Explorer, and commercial van sales limited Ford Motor Company's decline to just 1% compared with April 2013. After demonstrating sales gains during the first quarter of the year, Lincoln sales fell 11%.

General Motors--General Motors (GM) enjoyed a 7% increase in sales compared with the same month in 2013. All GM brands were up in April, with Buick and GMC increasing by double digits. Sales of the redesigned 2014 Silverado and Sierra pickup trucks, however, continued to lag the performance of their predecessors despite significant incentives added to boost interest in the models.

Hyundai Group--Sales at Hyundai and Kia rose 8% compared with April of 2013, with Kia seeing a 13% gain compared with Hyundai's more modest 4% increase.

Jaguar Land Rover--Land Rover sales improved 28% over last year, while Jaguar declined by 9%.

Maserati--Buoyed by the new Ghibli and Quattroporte sedans, Maserati sales continued to drive huge gains for the Italian luxury brand.

Mazda--Mazda sales surged in April, notching a 13% improvement compared with the same month in 2013.

Mitsubishi--The third most-improved brand in April, Mitsubishi sales increased 47% compared with the same period last year.

Nissan Group--Thanks to strong performance by both the Infiniti and Nissan brands, Nissan Group's overall sales rose 18% in April 2014 compared with April 2013.

Subaru--In a continuation of what has proven to be a long and steady upward sales trajectory, Subaru deliveries rose 22% in April compared with the same month in the previous year.

Tesla--Sales of the electric Tesla Model S rose 2% over April of 2013. Notably, Tesla sells nearly twice as many cars as Jaguar does in the United States.

Toyota Group--In April, Toyota Group sales rose 13% compared with the same month one year ago, with all of the automaker's brands performing well except for Scion. Notably, Toyota reported that FJ Cruiser sales quintupled last month, in advance of the retro SUV model's cancellation.

Volkswagen Group--Though all of its luxury brands--Audi, Bentley, Lamborghini, and Porsche--enjoyed year-over-year sales gains in April 2014, Volkswagen's overall sales declined by 1% because Volkswagen brand sales fell 8%. Further, April represents the 13th consecutive month that Volkswagen brand sales have declined compared with the prior year.

Volvo--Volvo registered a year-over-year sales uptick of 4% in April.

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