Winners and losers in April 2015 new car sales

THE STREAK CONTINUES: INDUSTRY HAS SHOWED GAINS FOR THE PAST 14 MONTHS

The Detroit 3, Nissan and Hyundai all posted U.S. sales increases for April as the industry appeared poised to stretch its streak of gains to 14 months. FCA US’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.

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

The automakers were the first to report results for a month that was projected to climb 5.9 percent to 1.47 million light vehicles, according to the average estimate from 12 analysts surveyed by Bloomberg.

The seasonally adjusted sales rate for light vehicles is forecast by analysts to come in at 16.7 million. That would be down from March’s 17.1 million but up from 16.1 million in April 2014.

GM today projected an April SAAR of 16.7 million. Chrysler’s forecast was 16.6 million after stripping out 400,000 medium- and heavy-duty trucks included in its estimate.

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

Company results

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, the company said in a Twitter posting. Some analysts had projected a decline for Hyundai.

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.

Trucks rule

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

Jessica Caldwell, senior analyst with Edmunds.com, said April is likely to be the 20th straight month in which light trucks outsell cars in the U.S.

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.

Morgan Stanley analyst Adam Jonas forecasts an 8.2 percent gain in light truck demand and a 3.7 percent advance for cars in April.

“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 5.6 percent through March. 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.

One race to watch in April and in coming months: The battle for the best-selling luxury brand. Through March, BMW led Mercedes by just 336 vehicles and Lexus by 1,312. But the momentum is behind Lexus, where deliveries have surged 19 percent this year, compared with gains of 8.4 percent at both BMW and Mercedes. BMW captured the luxury sales crown in 2014.

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