This Tweet caught my eye today.
Advance retail sales for April have not been posted. The pickup was March, the last month of the first quarter. It’s a huge mistake to assume a March pickup will represent the second quarter.
April Auto Sales offer our first glance at a consumer demand.
Dismal April Car Sales
- Ford Motor posted a 4.7-percent decline in sales, with retail sales to consumers down 2.6 percent. Pickup trucks were up 0.9 percent, but SUV and passenger car sales were down 4.6 percent and 15 percent respectively.
- Nissan Motor’s sales hit quite a bump, plunging 28 percent in April. Nissan cars dropped nearly 35 percent and SUV and truck sales were down 23.1 percent. Even sales of the company’s popular SUV crossover model Rogue were down almost 15 percent.
- General Motors announced last month that it would no longer report monthly sales and instead will just post sales on a quarterly basis. But industry estimates showed the company posting a monthly decline for April of anywhere up to 8 percent.
- Toyota posted a 4.7 percent decline in sales for April, with a 1.5 percent increase in SUV and pickup truck sales offset by a 12.7 percent drop in passenger car sales. Sales of the company’s recently revamped flagship Camry sedan were down 5 percent.
- Fiat Chrysler Automobiles (FCA) posted an overall sales increase of 5 percent in April. But retail sales to consumers were down 1 percent while lower-margin fleet sales to rental car companies and government agencies were up 5 percent.
Sales Down, Incentive Up
MarketWatch comments on Weak Demand Despite Strong Incentives.
- Auto makers spent about $3,700 per vehicle in discounts and other incentives in April, about 5% higher than a year earlier, according to research firm LMC Automotive. But the deals were heavily tilted toward crossovers and SUVs, while incentives on car models declined.
- It is a sign the price pressure that has hurt profitability in car categories in recent years could be spreading to more-lucrative segments like crossover SUVs.
- Fuel prices also are creeping higher. Average regular retail gas prices reached $2.80 last week, according to the U.S. Energy Information Administration, the highest since 2015. Prices are expected to rise and could top $3.00 through the summer driving season.
Retail spending for the second quarter is off to a very slow start.
GDPNow Spotlight
GDPNow is off to it’s typical robust start: Here We Go Again: GDPNow Projects 4.1% GDP
Once again my typical mental wager on the GDPNOw initial forecast is as follows: “I’ll take the under, way under”.
Weak Start
Yesterday, I commented Consumer Spending Rebounds in March: I Propose it’s Net Negative for 2nd Q GDP
Auto sales offer a hint that forecast may be correct.
It’s not just the US either, as noted by Germany Retail Sales Unexpectedly Decline 4th Month, 7th Time in 9 Months.
Inflation Scare
Inflation concerns may soon give way to something far different. For discussion, please see Velocity of Money Picks Up: Inflation Coming? Stagflation? How About Deflation?
Mike “Mish” Shedlock
March had more selling days and April fewer than last year. If GM sales were down 5% then annualised sales may have fallen short of 17 million for the first four months. Consistent with rising interest rates and a choking stock market.
Same with us. We have 10 and 12 year old cars with no new purchase in sight. Adding Bluetooth and USB (I added CarPlay as well) is cheap and simple if you have ever installed a stereo (or pay a shop to do it).
Liz Ann Sonders should have admitted a mistake
Your comments seem to be appropriate
Been driving around rural TN and have noticed many run down looking abodes, but the cars parked in front all look relatively new! Seems like everyone has updated their cars the past 8 years or so (except for me!). Probably the result of good economy, loose credit, and various government programs that pull forward demand. However, that’s the problem: who is left to sell cars to?
I was expecting a short term bump to auto sales as consumers rushed to buy before the steel tariffs push prices significantly higher. The absence of a bump can’t be a good sign.
It doesn’t look like you are drinking the Kool Ade and singing “Happy Days are Here Again”.
Yes cars are lasting a lot longer now, as well as getting much better mileage. That cannot be good for car sales, but if one company makes better cars the others have to keep up or go out of business. It was not that long ago a car was worn out at 100k miles. I know a guy with a 1988 Ford F-250 diesel that has over a million miles on the original engine, and the truck looks like it is good for a million more.