NACS: New Vehicle Sales Won't Grow in April

Revised full-year forecast calls for modest increase over 2015; total light-vehicle forecast for 2016 remains unchanged at 17.8 million.

DETROIT, Mich. April 26, 2016; The NACS reported that new-vehicle retail sales in April are expected to reach 1.195 million units, the same level as a year ago on a selling-day adjusted basis, according to a monthly sales forecast developed jointly by J.D. Power and LMC Automotive.

Retail sales through the first four months of 2016 are expected to reach 4.3 million units, a 0.5% increase on a selling-day adjusted basis compared with the same period in 2015. Based on the modest growth exhibited year-to-date, LMC Automotive and J.D. Power are reducing their retail light-vehicle sales forecast for the year to 14.3 million units from 14.5 million units. This revised full year outlook is a 1% increase compared with 2015, when retail new-vehicle sales totaled 14,245,231—the best retail sales year since 2001.

While the full-year retail forecast has been revised downward, LMC Automotive expects those retail sales to be recouped through increased fleet sales. As such, the total light-vehicle forecast for 2016 remains unchanged at 17.8 million.

Additional highlights:

•The seasonally adjusted annualized rate (SAAR) for retail sales in April 2016 is projected to reach 14.1 million units, a rebound from the 12.6 million units in March, and up from 13.6 million units in April 2015.

•Total light-vehicle sales in April are expected to reach 1,523,000, up 1% on a selling-day adjusted basis from 1,452,241 a year ago and the strongest total sales in April on record.

•The SAAR for total sales is projected at 17.6 million units in April 2016, up 0.8 million units from 16.7 million a year ago.

•Fleet sales in April are expected to hit 328,000, a 4.7% increase from 301,684 in April 2015.

•Through the first two weeks of the month, the average transaction price of $30,902 is the highest level ever for April, surpassing the previous high of $30,716 set in 2015.

•Consumers are on track to spend more than $36.9 billion on new vehicles in April, surpassing the previous record for the month of $35.3 billion set in April 2015.

“Top-line performance of the industry remains robust—retail demand is strong, transaction prices are at record levels and consumers will spend more on new vehicles than in any other April on record; however, the rate of unit growth is unquestionably slowing,” said John Humphrey, senior vice president of the global automotive practice at J.D. Power. “The slowing rate of growth, shift in consumer demand away from cars and toward SUVs, and elevated fleet volumes pose significant challenges to manufacturers as they compete in the marketplace.”

Jeff Schuster, senior vice president of forecasting at LMC Automotive, said: “We fully expect 2016 auto sales to be another record year in the United States, but there is also no question that we will see a slower rate of growth than in the past few years of recovery. Some retail light-vehicle softening in the past couple of months is partially due to comparisons with robust sales last spring. That said, with volatility comes a shift in expectations to more downside risk than upside potential for this year and next.”