Best April sales in decade expected, driven by light trucks

U.S. new-vehicle sales are projected to reach the highest April level in a decade, capping the best four-month start to a year since 2001.

Four forecasts -- calling for a year-over-year increase of 5.2 percent to 6.1 percent this month -- show the industry remains on track to finish 2015 right around 17 million units, a threshold last crossed in 2001. TrueCar.com recently increased its full-year forecast to 17.1 million, citing rising consumer confidence and continued low unemployment among the factors pushing auto sales higher.

“Underpinning this solid outlook is an incredible appetite for crossovers, sport utilities and pickup trucks,” Eric Lyman, TrueCar’s vice president of industry insights, said today in a statement. “Automakers with strong light-truck offerings continue to gain and will benefit from the likelihood gasoline prices will remain low this summer.”

Light trucks are estimated to represent 56 percent of sales this month, TrueCar and J.D. Power said. Trucks have not accounted for more than 55 percent of sales in any April since 2004.

Kelley Blue Book said it expects sales to rise 11 percent for compact utilities, 9.6 percent for midsize utilities and 6.3 percent for full-size pickups, while falling 3.1 percent for midsize cars.

Stronger truck sales mean larger profit margins for many automakers as consumers pay higher prices. J.D. Power said average transaction prices are on pace to set an April record, climbing from $29,948 a year ago to $30,680 in the first half of this month. It said that would result in consumer spending of about $36.2 billion, also an April record.

“Overall, auto sales remain strong, a trend that is sustainable throughout 2015 due to consumer demand that is being fueled by 50 new or redesigned models in showrooms this year,” Jeff Schuster, senior vice president of forecasting at LMC Automotive, said in a statement. “High year-over-year growth will become more challenging over the next few months, but a slip in the growth rates doesn’t change the underlying positive trend.”

LMC, which develops its forecasts jointly with J.D. Power, said it is holding its 2015 forecast at 17 million units but reduced its retail outlook by 100,000 units, to 13.9 million, because fleet sales have been slightly higher than expected.

LMC said it expects the seasonally adjusted, annualized selling rate to be 16.6 million units for April, down from 17.1 million in March but up from 16.1 million a year ago. KBB was more conservative, estimating the SAAR to be 16.5 million, while Edmunds.com called for 16.7 million and TrueCar projected 16.8 million.

“It is very common for April sales to be slower than March, which typically gets a boost from certain automakers who offer great deals to motivate shoppers as the companies close their fiscal year,” Edmunds senior analyst Jessica Caldwell said in a statement.

“In fact, we often think of April as the calm before the summer storm. It won’t be long before the summer selldown of the outgoing model-year vehicles, which always draws lots of foot traffic through dealerships.”

All four forecasts would result in a January-through-April total of more than 5.4 million, the best first third of a year since 2001, when the total for that period reached 5.48 million.

The TrueCar and KBB forecasts for April show the biggest market share gains going to Fiat Chrysler Automobiles and Nissan North America. TrueCar said Subaru may post a 24 percent sales increase, the most among the 10 largest automakers.

The forecasts show General Motors and American Honda each losing share and Ford Motor Co. posting sales roughly in line with the industry’s average increase, which would be an improvement from its performance in most recent months. Estimates for Toyota Motor Sales U.S.A. are mixed. The only major automakers seen as possibly reporting a year-over-year volume decline are Volkswagen Group of America and Hyundai-Kia Automotive.

Incentive spending has risen 0.6 percent from a year ago but dropped 4.4 percent from March, TrueCar said.