Q1 Revenue, Earnings Up for New Car Retailers

April was a modest month for auto sales, though sales declines were overstated given that April had  two fewer selling days.

“Although April sales will be underwhelming, it’s important to note that both March and April results are affected by quirks in the industry sales calendar,” said Thomas King, Senior Vice President of the Data and Analytics Division at J.D. Power. “March benefited from an extra weekend this year, while April sales have been negatively affected by having one less selling weekend compared to 2017. When looking at the two months combined, retail sales will be down only modestly from last year.”

Incentive spending continued to be a concern with monthly incentives at $3,698, up 5.1% over April 2017. Incentive spending was driven by trucks and SUVs, where incentives were up $426, while cars were down $226 year-over-year.

Commenting on the macro economic environment, Jeff Schuster, President, Americas Operations and Global Vehicle Forecasts at LMC Automotive, said, “Uncertainty and unfavorable factors appear to be mounting for autos, including a volatile stock market, rising interest rates, rising oil prices and potential trade roadblocks. But the auto industry is resilient and disciplined. It’s shrugged off most of the concerns to date. Going forward, it wouldn’t take much to turn delicate stability into a more pronounced pullback. Keep an eye on the economy after 2018, as signals are increasing that a mild recession could be on the horizon.”

Despite the level of uncertainty, sales have been consistent. LMC’s forecast for 2018 total light-vehicle sales is holding at 17.0 million units, a decrease of 1.1% from 2017. The retail light-vehicle forecast is also consistent with last month, rounding up to 13.8 million units, a decline of 1.6% from 2017.

Category: General Update, News