UPDATED: 4/24/14 5:50 pm ET -- adds TrueCar outlook
DETROIT -- U.S. auto sales are on pace to rise 9 percent in April from a year ago, as warmer weather coaxes out more shoppers who stayed home during the unusually harsh winter, according to two forecasts released today.
One of the firms, LMC Automotive, said it has raised its North American production outlook for the year.
LMC and Edmunds.com project that the industry’s seasonally adjusted, annualized selling rate will surpass 16 million for the second consecutive month though it will fall just short of March’s 16.3 million sales rate.
TrueCar.com forecast U.S. light-vehicle sales will reach 1.38 million this month, an increase of 7.5 percent from April 2013 but down 10 percent from March 2014.
“Automakers were determined to make sure March sales momentum continued in April, putting sales back on track for 2014,” Larry Dominique, president of ALG and executive vice president of TrueCar, said in a statement. He said Asian manufacturers "turned up the incentive dial" in April while the Detroit 3 "remained more restrained.”
Another strong sales month would go a long way toward easing concerns raised by weak results amid January and February snowstorms. U.S. light-vehicle sales climbed 1 percent through March.
“April’s numbers suggest that car shoppers are still motivated to buy new cars, erasing any doubts raised by lackluster sales at the beginning of the year,” Jessica Caldwell, Edmunds’ senior analyst, said in a statement. “The sales performance the last two months is more in line with what we projected for 2014, and there’s every reason to believe that car shoppers will continue to keep this pace.”
The forecasts of 1.4 million new cars and trucks sold this month would represent the best April volume since 2006, Edmunds said. LMC is forecasting the best retail sales volume for any April since 2005, with retail sales also up 9 percent.
Automakers are scheduled to report April sales a week from today on May 1.
LMC said it still expects full-year sales of 16.1 million units, which would be 3.3 percent more than in 2013. If the April forecasts are accurate, U.S. sales through the first third of 2014 would be up 3.4 percent year-over-year.
LMC said it increased its North American production forecast for 2014 by 100,000 units, to 16.6 million, or 3 percent more than in 2013, with much of the growth attributable to a 21 percent gain in premium vehicles. First-quarter production totaled 4.2 million units, up nearly 4 percent from the same period last year.
“Auto sales are hitting their stride as the spring selling season begins, and the pace has returned to the level expected at this stage of the recovery,” Jeff Schuster, LMC’s senior vice president of forecasting, said in a statement. “Fueling the growth further as the year progresses is a very robust level of new-model activity, with 63 new or redesigned models expected to hit showrooms, a 60 percent increase from last year.”
Executives from several large dealership groups that reported quarterly earnings this month, including AutoNation, Sonic Automotive and Penske Automotive, said their stores are seeing strong traffic and sales in April.
“Usually, we see a big fall-off in intensity when you have a period like the end of March and then you start a new month,” AutoNation COO Mike Maroone said. “But that didn’t happen this time, and business has been very strong in April, right from day one. So that to me says, now there is something more going on here, namely the people who simply postponed in January, February and early March are now back in the marketplace.”
General Motors CEO Mary Barra today said the company has seen no “meaningful impact” on U.S. sales after issuing recalls for 7 million vehicles since mid-February. Many of the recalled vehicles, including the Chevrolet Cobalt and Saturn Ion, are no longer in production and some are from brands that GM shut down.
Edmunds projects GM’s market share will be 17.7 percent in April, 1.1 percentage points higher than in March but 0.8 percent lower than April 2013.
In addition to GM, Edmunds projects that Ford Motor Co., American Honda Motor Co., Hyundai-Kia Automotive and Volkswagen Group of America all will lose U.S. market share compared with a year ago. It estimates that Toyota Motor Sales USA, Chrysler Group and Nissan North America all will post double-digit year-over-year volume increases this month.
Data from J.D. Power and Associates, which LMC uses to develop its forecasts, shows that buyers age 35 and younger are expected to account for a quarter of retail sales in April, which it said marks a return to prerecession levels. It said nearly a third of the vehicles sold this month will be financed with loans having terms of at least 72 months, with younger buyers tending to choose longer loans.
In a related matter, railroad delays caused by winter weather and geographic shifts in production are creating inventory bottlenecks for certain vehicles near some U.S. auto plants, The Wall Street Journal reported today.
Amy Wilson and Jamie LaReau contributed to this report.