With signs that more car shoppers were jumping onto U.S. dealership Web sites in April, analysts expect the industry's renewed sales momentum to continue in the coming months.
U.S. auto sales are back on track to exceed 16 million vehicles this year, with two consecutive months of pre-recession sales levels easing worries that the market was losing steam.
Sales rose 8 percent in April from a year ago, resulting in the industry's highest two-month volume -- 2.93 million units -- since May and June 2007. That follows a disappointing stretch of results during the winter, when dealership traffic plunged amid record-setting snowfall and cold temperatures.
"The momentum has certainly shifted," said Larry Dominique, executive vice president of industry solutions at TrueCar. "To get to 16.3 or 16.4, we'd have to have a really strong second half of the year, but I think we're on course to get to 16.1 fairly easily. As long as the economy stays in expansion mode and interest rates stay low ... we should see steady growth."
Much of the April increase was because of gains by pickups and SUVs. Growth in those lucrative segments, at a time when gasoline prices in many states climbed closer to $4 a gallon and warmer weather typically shifts demand away from light trucks, is good news for automakers' bottom lines.
Sales rose 12 percent for full-sized pickups and 30 percent for SUVs in April. SUVs have been selling an average of 20 days faster than other vehicles, according to Edmunds.com.
Meanwhile, demand for compact and mid-sized cars, which account for 30 percent of the market combined, has stalled. Sales in those two segments rose just 1 percent in April and fell 4 percent in the first four months.
"Both midsize and small cars are being adversely affected by small utilities this year," said Erich Merkle, Ford Motor Co.'s chief U.S. sales analyst.
"We see small utilities as a long-term trend that will prevail through this decade."
Analysts say they see more positive signs for sales in the middle third of the year. Dealer.com, whose software powers a majority of U.S. dealership Web sites, tracked a 13 percent year-over-year increase in visits to those sites last month and a 19 percent jump in the number of customers using them to contact dealers.
"There should be strong growth going into May because a lot of these consumers are reaching out to dealers, with a sale to follow up soon after," said Dave Winslow, Dealer.com's chief digital strategist. "If I fill out a lead form in April, I might not be purchasing until May."