No April Fools: Sales Are Booming
Up, up, and away. It's another bust-out month for cars as consumer confidence rises, vehicles need replacing, and the deals are too good to refuse. Ford was up 18% and even its Lincoln division -- which was all but MIA but has a new ad agency and brand campaign -- saw a 21% improvement.
Nissan, which has been struggling in recent months largely because of a raft of competitive launches, also saw its first big increase in a while, with a 23% improvement. Honda saw a 7.4% increase versus the year-ago month. The Honda brand posted a 6.6% increase, and Acura increased 14.2%.
Among Ford’s fellow Michiganders, Chrysler was up 11%, its best month in six years, per the automaker; and General Motors saw an 11% increase and did its best April in five years.
Other bests: Subaru posted its best April ever. So did Mercedes-Benz. So did Hyundai. And in another sign of the strength of the luxury market, Porsche posted its highest sales month ever -- for any month -- in its history in the U.S. For the first time the company sold more than 4,000 cars in the U.S.
Jesse Toprak, head of industry analysis at TrueCar.com, says to look at the stock market. "[A bull run] has a direct and indirect impact on luxury sales. There's a psychological impact, though, and that's probably more important: Consumers feel more comfortable [making a luxury purchase]."
While Toyota reported selling 176,160 vehicles in the U.S. in April, constituting a 5% decrease, there's a good chance that had to do with incentive discipline, notes Toprak. "It looks like they've been keeping incentives in tight check in April. Right now, they have one of the lowest incentive spend numbers, at about $1,400 per unit. Coupled with that, they compete in very price-sensitive segments, where they generate lots of volume." He notes that Toyota may be rethinking for this month, as it has announced new financing and leasing promotions for May.
Toprak says the Detroit automakers’ sales numbers show, to some extent, the opposite side of the incentive coin. He says average per-vehicle incentive spend for GM, Chrysler and Ford was about $2,000 per vehicle last month, with Chrysler spending the most. But he notes that a lot of those numbers reflect high truck volume last month, since there’s a much higher per-vehicle incentive offered on trucks than cars. "A better comparison of [how automakers are spending on incentives] would be to look at compact cars made by, say, Toyota versus those made by GM."
Another big story this month is truck volume. Ford had its best sales month for F-150 since pre-recessionary times; GM trucks -- Chevy Silverado and GMC Sierra -- were up 23%; sales of Chrysler's Ram Truck brand vehicles increased 49%; Toyota saw a 14.6% increase in sales of its Tundra. "The full-size truck segment has been overdue for recovery," says Toprak. "Truck sales are a harbinger of the economy; businesses buy trucks, but they don't buy until they know prospects for growth are good."