U.S. Light-Vehicle Sales Start Q2 with Strong Results

Higher incentives in April were seen despite dealers having a much more favorable mix of strong-selling trucks on their lots vs. a year ago.

Haig Stoddard, Industry Analyst

May 1, 2018

3 Min Read
U.S. Light-Vehicle Sales Start Q2 with Strong Results

U.S. light-vehicle sales equated to a 17.1 million-unit seasonally adjusted annual rate in April, making it the ninth straight month to meet or exceed the 17 million level, and generally carrying forward the solid first-quarter results of 17.2 million.

The total was in line with expectations despite a severe downturn at Nissan, as well as an overall decline in the retail portion of April’s total that overwhelmed a slight increase in fleet volume.

April’s SAAR was well below March’s 17.4 million but slightly above the same-month 2017’s 17.0 million.

Raw volume for the month totaled 1.346 million in April, which was below same-month 2017’s 1.42 million. However, the daily selling rate over the month’s 24 selling days increased 2.4% from like-2017’s to 56,103 from year-ago’s 54,527 – 26 selling days – and was the second consecutive month the DSR posted a year-over-year rise.

Year-to-date volume though April totaled 5.435 million, slightly above four-months 2017’s 5.428 million. With an extra selling day over last year in May, as well as an additional weekend in June, year-to-date volume easily could remain above year-ago through the first half of the year.

However, the market still has more headwinds to contend with than a year ago, exemplified by incentives continuing to rise faster than average transaction prices. Some of the headwinds include higher fuel prices and interest rates, stronger competition from late-model used vehicles, a lack of excess pent-up demand and continued low penetration of newer vehicles in the inventory mix.

The higher incentives also are being seen despite dealers having a much more favorable mix of strong-selling vehicles, namely trucks, on their lots vs. a year ago.

Based on data from ALG, average incentive spending per vehicle as a percent of average transaction prices has increased year-over-year 37 consecutive months through April. In April, average incentives increased 8.5% from like-2017, while ATPs rose just 2.7%.

Nissan’s DSR declined 22.1% from April 2017 and was its third straight downturn. The automaker’s 6.5% market share in April was its lowest monthly total since April 2012.

Market leader General Motors recorded both its second straight year-over-year increase for DSR – up 5.4% – and higher market share; 17.6% vs. year-ago’s 17.2%. GM’s increase was led by strong results in pickups, including a whopping 29% increase by the Chevrolet Silverado, which had shown some weakness early in the year.

GM’s CUV sales, led mostly by its newer products in the segment group, increased 17.3% from last year, and its SUVs were up 25.0%.

Based on DSR, several automakers recorded double-digit gains, including BMW, Daimler, FCA, Subaru, Volvo and Volkswagen Group. Also posting increases were Ford, Jaguar Land Rover, Kia, Mazda, Mitsubishi and Toyota.

Besides Nissan, declines were posted by Honda, Hyundai and Tesla.

By vehicle type, car deliveries fell 14.6% year-over-year and were down 13.7% in the first four months of 2018. Trucks increased 13.6% in April and were up 8.4% year-to-date. Furthermore, trucks, which are likely to top 70% market penetration for the first time sometime this year, accounted for 68.5% of April’s volume, compared with 62.1% in same-month 2017.

Sales of domestically made LVs increased 1.4% in April, but their year-to-date total remained 1.1% below January-April 2017. Import volume increased 8.2% last month and was up 4.6% year-to-date. April’s import penetration of 23.0% was more than an entire percentage point above like-2017, and was the highest for the month since 2011.

By segment group, Small Car and Middle Car declined 14.7% and 19.9%, respectively, in April from year-ago. Luxury Car declined 9.2%, but the small-volume Middle Luxury and Luxury Specialty segments increased in April and year-to-date volume for both also are up. The Large Car segment, which accounts for only 1.4% of the market and is mostly driven by fleet demand, increased 18.0% in April, but is down 14.2% year-to-date.

All truck segment groups increased DSRs in April from like-2017. CUV was up 16.0%, SUV increased 15.5%, Pickup rose 10.9% and Van crept in with a 4.6% gain. The only truck segment to decline was Middle SUVs, down 3.0% in April and 4.3% year-to-date.

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About the Author(s)

Haig Stoddard

Industry Analyst, WardsAuto

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