Edmunds.com: April Could Be Last Month of Strong Sales Until Late Summer, Fall

As franchise dealers brace for dwindling supplies, Edmunds.com’s April new-vehicle sales forecast reflected the softening figures stemming from the Japanese disasters.

The site thinks April new-unit sales, including fleet sales, are expected to be approximately 1,171,000 units, a 19.3-percent increase from April of last year, but a 6.0-percent dip from March.

Analysts believe retail sales are going to be off in April, too, slipping to approximately 942,000 units from about 975,000 vehicles last month.

Edmunds.com predicts that April’s seasonally adjusted annualized rate will be 13.3 million, up from 13.1 million in March. The site projects SAAR for retail sales will increase over last month to about 10.7 million in April.

Several of the largest dealership groups, including Sonic Automotive, AutoNation and Asbury Automotive Group, all recently touched on how Japanese production constraints were going to affect their strategies. Edmunds.com senior analyst Jessica Caldwell said these groups are making alternative plans for a good reason.

“As inventories rapidly deteriorate, April could be the last month that we’ll see strong sales numbers until late summer or early fall,” Caldwell conceded.

“May and June are traditionally high-volume months, and with anticipated supply constraints — especially on the fuel-efficient vehicles that have been in higher demand with spiked gas prices — inventories will be exhausted further,” she added.

Caldwell went on to note how tighter new-vehicle inventories are presenting franchise dealers with a different problem.

“The big unknown is how this market will adjust to supply restrictions when demand has been the key problem for the past three years,” she surmised.

Along with making its sales forecast, Edmunds.com estimated average automaker incentives in the U.S. will be $2,100 per vehicle sold in April. That amount would be off by $268, or 11.3 percent, from March. Looking back a year ago, the difference is even greater as incentives are down by $533, or 20.2 percent.

Edmunds.com also pointed out April had 27 selling days, one more than the same month last year.

When the month wraps up, analysts contend the combined monthly U.S. market share for Chrysler, Ford and General Motors will come in at 45.0 percent, down from 45.5 percent in April of last year, but up from 43.4 percent in March.

“General Motors is poised to regain the sales crown in April after Ford briefly wrested it away in March,” declared Edmunds.com senior analyst Michelle Krebs.

“In fact, GM was the only major automaker to show a month-to-month sales increase over March, even as it — along with the rest of the industry — pulled back a bit on incentive spending,” Krebs concluded.