Sales Pace Of New Vehicles Expected To Remain Strong In April

Cox Automotive New Light-Vehicle Sales Forecast for April 2018: 1.37 million units

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Apr 26, 2018, 03:00 ET

ATLANTA, April 26, 2018 /PRNewswire/ -- 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%

¹April 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%

¹Cox 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.

Even with significant headwinds, though, there is strong underlying support for healthy vehicle sales. Gradual interest rate increases have been expected and should not cause a large decline in affordability or overall market demand. Overall, economic conditions remain very strong with high consumer confidence and low unemployment rates.

Importantly, Trump administration tax reform is showing early signs of stimulating even more growth than initially assumed by Cox Automotive in December, when the legislation was passed. The current, robust sales pace may drive a future, upward revision of the Cox Automotive full-year sales forecast of 16.7 million units.

Cox Automotive will host its monthly automotive sales day call on Tuesday, May 1, at 11 a.m. EDT. Chesbrough and Krebs will provide an economic overview, share industry trends and answer questions. To discuss any automotive-related topic with a Cox Automotive analyst, contact a member of the Public Relations team to schedule an interview.

About Cox Automotive
Cox Automotive Inc. makes buying, selling and owning cars easier for everyone. The global company's 34,000-plus team members and family of brands, including Autotrader^®, Dealer.com^®, Dealertrack^®, Kelley Blue Book^®, Manheim^®, NextGear Capital^®, VinSolutions^®, vAuto^® and Xtime^®,are passionate about helping millions of car shoppers, 40,000 auto dealer clients across 100+ countries and many others throughout the automotive industry thrive for generations to come. Cox Automotive is a subsidiary of Cox Enterprises Inc., a privately-owned, Atlanta-based company with revenues exceeding $20 billion. www.coxautoinc.com