Hey, look at a smokin’ hot marketplace snatch another victory. Most forecasters expected March U.S. auto sales to fall a bit, but some last-minute fancy footwork pushed the industry back into plus territory by a half percent.
Again. Now 61 times in the last 63 monthly reports that volume topped the year before. Even the two losers weren’t bad: February 2014 slipped 966 units amid winter storms that closed auto plants. And August 2010, post-Cash for Clunkers.
March was a classic glass-half-full or half-empty moment three months into a sixth straight growth year.
Auto sales still have legs.
But those legs are tired.
Like a distance runner aiming for another personal best, we’re still ahead of the curve on time. But we can feel the burn in our thighs, hear ourselves panting.
Hurtling obstacles once was easy. Tsunami? Floods? Government shutdowns? European credit crises? No problem.
Now we scan the path for tree roots. A March with one fewer selling day and one fewer weekend almost sent us sprawling.
Don’t get me wrong. March’s 17.1 million selling rate was the third highest monthly SAAR since the recession. Analysts loved it.
“March was super-strong for a four-weekend month,” TrueCar.com President John Krafcik said today. “And with incentive spending down, it’s a sign of a strong auto market.”
And IHS Automotive analyst Tom Libby sees “nothing but positive tailwinds” in the economy. He’s especially encouraged by steady interest rates and rising employment rates, housing values and personal income.
For me, one really encouraging sign was an industry decline in incentives and rise in average transaction prices, as measured by TrueCar.
March sales revealed a fascinating pattern. General Motors, Ford Motor Co. and Nissan North America all recorded single-digit sales declines. But each trimmed incentives sharply and raised their average transaction prices about 4 percent.
Compare that to sales winners Toyota Motor Sales, FCA US and Hyundai-Kia. Each pumped up incentives strongly. March average transaction prices fell at Toyota and FCA and Kia while Hyundai’s ATP growth was below industry average.
I am encouraged by these differences. If industrywide spiffs fall and ATPs rise, I’m fine with automakers tactically deciding to buying market share some months and other months yielding share to take profits. I see it as evidence of a healthy market.
That said, it’s time to savor this marketplace while it lasts.
I remember something else Libby said today about March: “I’m not sure how much better it gets from here.”