Autos See Lower Incentives, Slightly Higher Sales

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April is winding down, which means that automotive industry watchers in the U.S. are pulling out the Ouija boards to try to get an early fix on April new-vehicle sales volume. One thing seems clear: the big incentive pushes that started last month, when Toyota push-started its sales after its acceleration issues, and the beginnings of a thaw in the credit tundra (no pun intended) are going to reflect on April sales as well.

The good news, per J.D. Power and Associates, is that incentive levels on a per-vehicle basis are actually lower this month than they were both last month and versus April last year: $2,800 versus $3,400 in April, 2009 and about $200 less than March this year. Jeff Schuster, executive director of global forecasting at J.D. Power and Associates, says less cash on the hood means less likelihood of a dreaded reprise of the early-millennium incentive wars that drained automaker coffers.



"This decline in incentives, due to a lower percentage of previous-year models in inventory this year, and the upturn in volume from last April have created a healthier environment -- which is consistent with the improved first-quarter financials being reported," he says.

Based on its Power Information Network, a kind of sales-data electrocardiogram of some 8,900 dealerships across the U.S., J.D. Power is anticipating new-vehicle retail sales at 804,200 units. That's not stellar, if you use April as a stem cell for growing a full-year sales picture (a projection known in the biz as Seasonally Adjusted Annualized Rate or SAAR).

During the salubrious years earlier in the decade, yearly sales were bobbing about in the 16 million range. But April SAAR is around 11.5 million units if J.D. Power's numbers are close to correct. The number is close to what the firm is predicting 2010 full-year sales will be by year's end -- around 11.7 million vehicles -- comprising both retail and fleet sales. This month will see a 22% improvement, per the firm, an increase in sales of some 1.8 million units.

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