Light trucks drive industry to 4.6% gain

U.S. light-vehicle sales, fueled by demand for light trucks, rose 4.6 percent in April as every automaker but Honda recorded an increase.

The industry stretched its streak of advances from the year-earlier month to 14 as total sales reached 1.46 million. But the results fell short of projections for a 5.9 percent gain, based on the average estimate from 12 analysts surveyed by Bloomberg.  Across the industry, car volume slipped 1.6 percent while truck demand surged 11 percent.

The seasonally adjusted sales rate -- 16.52 million -- was also shy of estimates in the 16.7 million range. The pace of sales in April was down from March’s 17.1 million rate but up from 16.1 million in April 2014.

Fiat Chrysler's 5.8 percent advance from a year-earlier marked the automaker’s 61st consecutive monthly gain. Nissan Group and General Motors were back in the winning column after March sales declines. Ford Motor Co. ended a two-month skid, while Hyundai defied analysts’ forecasts of a drop.

Each of those companies were among the biggest spenders on incentives last month, according to TrueCar.

The last time U.S. sales fell vs. the year-ago month was February of last year.

Company results

After posting seven consecutive gains, Honda Motor Co. was down for a second straight month in April.  The company fell 1.8 percent from a year earlier, as a 5.3 percent gain at Acura failed to overcome a 2.7 percent decline at the namesake brand.

Toyota Motor Corp.’s sales rose 1.8 percent to 203,329 -- its smallest advance since deliveries rose 1.7 percent in September 2014 -- on strong light truck demand. The Toyota RAV4 and Highlander crossovers logged their best-ever April results, and combined sales of the Tundra full-sized pickup and Tacoma midsize pickup rose by 9 percent.

“Light truck sales have carried the auto industry to its best start in 15 years,” Bill Fay, Toyota Division group vice president and general manager, said in a statement. “The demand for crossover SUVs is off the charts.”

Ford’s April sales rose 5.4 percent from a year earlier. The Ford brand was up 4.9 percent, while Lincoln advanced 20 percent. Ford said retail sales gained 7 percent and fleet deliveries were up 1 percent.

General Motors posted a 5.9 percent increase. Chevrolet gained 3.4 percent and GMC rose 20 percent. Cadillac’s 14 percent advance marked just its second gain in the last seven months. Buick fell 5.2 percent.

Jeep's U.S. deliveries jumped 20 percent to 71,759 last month, an April record. Sales of the new Renegade totaled 4,214 in its first full month on the market, FCA said today.

Volume advanced 4.3 percent at the Ram brand and 26 percent at the Chrysler brand, while slipping 16 percent at Dodge and 13 percent at Fiat. Dodge sales have been hurt by the discontinuation of the Avenger midsize sedan, and suspension of Caravan minivan output to retool a plant in Windsor, Ontario.

FCA’s overall light-truck sales slipped 1 percent while car volume rose 29 percent last month.

Nissan Group, meanwhile, said its sales rose 5.7 percent from a year earlier. The Nissan Division was up 5.4 percent, while Infiniti advanced 8.8 percent.

Hyundai’s U.S. sales rose 2.9 percent to 68,009 last month, setting an April record. Some analysts had projected a decline for Hyundai.

Deliveries rose 18 percent to 47,241 -- an April record -- at Subaru, extending the company's streak of monthly sales gains to 41 months. Volume rose 7.5 percent at Mazda and 26 percent at Mitsubishi.  

Audi, extending its hot streak, said U.S. deliveries rose 7.5 percent to 16,827 vehicles last month. April marked the brand’s 52nd-straight monthly U.S. sales record. “Strong demand in particular for models such as the Audi Q3 and the A3 gives us confidence that we will continue to draw new customers to our brand well into the summer,” said Mark Del Rosso, COO of Audi of America.

Sales slipped for the third straight month at the Volkswagen brand, with volume off 2.7 percent in April and 7.5 percent year to date.

Trucks rule

Light trucks and crossovers continue to dominate vehicle mix across the industry as gasoline prices remain low and a favorable credit environment makes it easier for consumers to purchase larger vehicles.

Even Porsche, once just a sport car maker, is benefiting from the renewed popularity of light trucks. The company's April U.S. sales rose 28 percent to 5,217 vehicles and crossed the 5,000 mark for the first time in any month. Behind the gain: An 80 percent rise in Porsche's U.S. truck sales last month that was fueled by the new Macan crossover. Overall, Porsche's truck deliveries are up 54 percent this year while car volume has slid 11 percent.

April was the 20th straight month in which light trucks outsold cars in the U.S., said Jessica Caldwell, senior analyst with Edmunds.com. The shift is taking a toll on brands dependent on cars. Sales at Fiat are off 5.9 percent and deliveries at Scion have slipped 18 percent this year through April. 

With demand weak for smaller cars, inventories are creeping up. Subcompact cars took an average of 98 days to sell in April, Edmunds says, which is a month longer than the industry average. Compact cars took 78 days to move, 34 days longer than compact SUVs, Caldwell said.

“Commentary from dealers suggests that April has been a bit of a lackluster month partially explained by tough comps last year with GM’s recall campaign,” Jonas said in a report Thursday. “The main question is whether the foreign [automakers] continue to bring the heat … on incentives.”

In March, the end of the fiscal year for many Asian automakers, Toyota, Nissan and Hyundai strived to regain market share by hiking incentives to woo customers from Detroit 3 showrooms, Jonas said.

TrueCar estimates industry incentives averaged $2,601 per vehicle last month, an increase of 0.6 percent over April 2014 levels, but down 4.4 percent from March.

Incentives

The biggest spenders on deals last month, according to TrueCar, were Fiat Chrysler (average incentive of $3,376 per vehicle), GM ($2,956), Kia ($2,758), Ford ($2,733), Volkswagen Group ($2,711), Hyundai ($2,710) and Nissan ($2,546), while Subaru ($711), Toyota ($1,757) and Honda ($1,787) offered the lowest average incentives per vehicle.

U.S. light vehicle deliveries have climbed 5.4 percent through April. Fueled by favorable financing terms, notably extended loans, higher leasing penetration, and steady economic growth, sales remain on pace to reach 17 million for the year, analysts say.

That would mark the sixth straight year of increase in the U.S. and the highest total since 2001.

The average new car loan issued in April was 67.8 months -- the longest average new car loan term in history, Edmunds said today. "Car shoppers are applying this trend to finance vehicles with higher transaction prices than they might otherwise choose," Caldwell said.

Toyota's Bill Fay said the automaker has increased its 2015 U.S. auto industry sales forecast to 17 million vehicles from 16.7 million on strong results through the first four months of the year and with positive economic signs pointing to a healthy summer selling season.

“We’re now a third of the way through 2015 and the industry is off to its best start since 2001, the last time the industry sold 17 million vehicles,” Fay said in a conference call with reporters. “Light trucks, especially compact and midsize SUVs and crossovers, have been driving the industry all year and they did so again in April.”

Luxury battle

In the closely watched battle for the best-selling luxury brand, Mercedes-Benz, excluding deliveries of the Sprinter van, pulled ahead of BMW in April and now leads its chief German rival by 1,900 vehicles in year to date volume. Mercedes also leads Lexus, in third place, by 4,288 through April.   

Through March, BMW led Mercedes by just 336 vehicles and Lexus by 1,312.

But the momentum is behind Lexus, where deliveries have surged 17 percent this year, compared with gains of 8.1 percent at BMW and 8.9 percent at Mercedes. BMW captured the luxury sales crown in 2014.

Mercedes reported April U.S. sales, excluding the Sprinter van, of 29,188. BMW said April U.S. sales totaled 26,952, an increase of 6.9 percent. Lexus posted April deliveries of 25,876, a jump of 12 percent.

There were 26 selling days in April, the same as last year.

Editor's note: An earlier version of this story misidentified the top-selling luxury brand in the U.S. through March.

Ryan Beene contributed to this report.