OREANDA-NEWS. April 27, 2018. U.S. new-vehicle sales in April are expected to fall 3.6 percent compared to April 2017, according to a forecast released today by Cox Automotive. However, despite the expected volume decline, the sales pace in the U.S. remains strong, at a seasonally adjusted annual rate (SAAR) of 17.3 million units, above year-ago levels. In April 2017, the SAAR was 17.0 million. 

"This year, April has two fewer selling days than last year, so sales volume can decline and the pace can increase," noted Cox Automotive Senior Economist Charlie Chesbrough. "That's what we are expecting this month: Volume of 1.37 million units, down 50,000 from last year, but a healthy sales pace of 17.3 million units, closer to last month's robust 17.4 million pace."

A record sales pace is within reach if reported sales come in stronger than forecasted. The highest seasonally adjusted annual rate for April—17.5 million—was reached in 2016. The Cox Automotive 17.3 million-unit SAAR forecast puts this record within reach. However, beating the 2005 sales volume record of 1.5 million is not likely.

Key Highlights for Estimated April 2018 Sales Forecast:

  • In April, new light-vehicle sales, including fleet, are expected to reach 1.37 million units, down 3.6 percent, or 50,000 units, compared to April 2017 and down nearly 17 percent from last month.
  • The April 2018 SAAR is forecast to be 17.3 million, up from the 17.0 million pace of April 2017 and down slightly from the 17.4 million last month.
  • An April SAAR record is possible – 17.5 million pace was achieved in 2016. Higher than expected sales, coupled with two fewer selling days, puts the record within reach.

Most Automakers Expected to See Sales Volume Declines
Cox Automotive forecasts most OEMs to report lower year-over-year sales in April. However, GM and VW are expected to see modest gains over last year due to strong new crossovers. The Jeep brand is also expected to post strong performance thanks in large part to fresh products offerings.

Kelley Blue Book Executive Analyst Rebecca Lindland said, "I expect another strong month from the Jeep brand. The new products are driving strong sales and, considering FCA's recent Q1 results, powering the bottom line as well. Of late, Jeep seems to be holding up the entire FCA tent."

 

Sale Forecast1

Market Share
 

Apr-18

Apr-17

Mar-18

YOY%

MOM%

Apr-18

Mar-18

MOM%

Apr-17

GM

245,000

244,406

296,341

0.2%

-17.3%

17.9%

18.0%

-0.1%

17.2%

Ford Motor Co

198,000

213,436

243,021

-7.2%

-18.5%

14.5%

14.7%

-0.3%

15.0%

Toyota Motor Co

194,000

201,926

222,782

-3.9%

-12.9%

14.2%

13.5%

0.6%

14.2%

Fiat Chrysler

175,000

176,176

216,063

-0.7%

-19.0%

12.8%

13.1%

-0.3%

12.4%

American Honda

130,000

138,386

142,392

-6.1%

-8.7%

9.5%

8.6%

0.8%

9.7%

Nissan

114,000

121,998

162,535

-6.6%

-29.9%

8.3%

9.9%

-1.5%

8.6%

Hyundai Kia

110,000

116,408

112,185

-5.5%

-1.9%

8.0%

6.8%

1.2%

8.2%

VW

53,000

51,797

57,394

2.3%

-7.7%

3.9%

3.5%

0.4%

3.6%

Subaru

52,000

52,368

58,097

-0.7%

-10.5%

3.8%

3.5%

0.3%

3.7%

Grand Total2

1,370,000

1,420,597

1,648,222

-3.6%

-16.9%

        

1 April 18 Cox Automotive Industry Insights Forecast; all historical data from OEM sales announcements

2 Includes brands not shown

Consistent with the trend seen all year, car sales are expected to see double digit declines as preference for SUVs/CUVs continues to grow. Large SUVs are selling well, particularly those with three rows. Pickup trucks, thanks to robust incentive spending, continue at a solid year-over-year pace.

"The continued decline in sedan sales is obviously weighing heavily on many of the large OEMS," noted Michelle Krebs, executive analyst at Autotrader. "Ford's announcement yesterday that it plans to wind down sales of its core cars lines – Fiesta, Focus, Fusion and Taurus – is a bold and risky move.  It's an indication tough decisions are being made."

 

Sale Forecast1

Market Share

Segment

Apr-18

Apr-17

Mar-18

YOY%

MOM%

Apr-18

Mar-18

MOM%

Apr-17

Mid-Size Car

125,000

155,518

145,032

-19.6%

-13.8%

9.1%

8.8%

0.3%

10.9%

Compact Car

150,000

189,051

185,306

-20.7%

-19.1%

10.9%

11.2%

-0.3%

13.3%

Compact
SUV/CUVS

245,000

220,920

299,172

10.9%

-18.1%

17.9%

18.2%

-0.3%

15.6%

Mid-Size
SUV/CUVs

180,000

185,477

213,556

-3.0%

-15.7%

13.1%

13.0%

0.2%

13.1%

Full-Size Pickups

205,000

196,361

242,315

4.4%

-15.4%

15.0%

14.7%

0.3%

13.8%

Grand Total2

1,370,000

1,420,597

1,648,222

-3.6%

-16.9%

        

1 Cox Automotive Industry Insights data

2 Includes brands not shown

All percentages are based on raw volume, not daily selling rate. There were 24 selling days in April 2018 versus 26 in April 2017.

Additional Insights from the Cox Automotive team
"The sales rate has been at or above 17 million since last August, suggesting the vehicle market is on sound footing," noted Chesbrough. "Along with positive economic news, buying conditions remain strong with robust credit availability and aggressive OEM 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."  

Chesbrough, however, cautions against the many factors creating difficulties for the industry. Federal Reserve interest rate increases are starting to influence the economy and auto loan rates have risen to levels not seen since 2013. Gasoline prices are rising again, negatively impacting consumer spending power and vehicle ownership costs. And, importantly, because of aggressive leasing strategies in recent years there are millions of "gently-used" off-lease vehicles now available to consumers, providing growing competition for the new-vehicle market.