After a strong three months, and an April in which the restive foot of the auto business slipped from the accelerator and rested just slightly on the brake, things are looking strong again.
Auto research and marketing site Edmunds.com sees strong sales of cars and trucks in the U.S. with economic fundamentals giving everyone a boost. The company projects sales of 1,420,937 new cars and trucks this month. That, if extrapolated full-year with seasonal variation, (in the business that's called Seasonally Adjusted Annual Rate, or SAAR), would be a 15.1 million-unit year. It would also be a 10.6% increase from last month and a 6.5% increase from May last year.
Edmunds.com sees all automakers getting sales increases versus last year and last month, although the firm is thinking Toyota will be essentially flat. The biggest gainer, Edmunds predicts, will be Nissan -- which, against its volume last May and last month, would see 19.6% and 25% sales increases, respectively.
Edmunds senior analyst Jessica Caldwell tells Marketing Daily that Nissan vehicles will roll off lots partly because U.S. preliminary pricing -- which is basic pricing minus incentives -- is at its lowest for the company since 2011. "I think that's healthy, and if you also look at days to turn [the number of days a car sits on a dealership lot], that is lowest for Nissan since late last year," she says. She points out that Nissan has made no secret of its desire to gain market share in the U.S., "and pricing is a way to do it."
One reason they -- and Toyota and Honda -- can do it is that the relative price of the yen, which had been low for months, but has seen a big correction in recent days.
As for last month, Caldwell says it was a bit of a disappointment, with SAAR under 15 million units after several months when it was above. "April is sandwiched between two strong months. It doesn't have a holiday, so no sales events, and it's tax season. So I'd be more concerned if we saw in May another month under 15 million SAAR."
She adds that the bullish market is driven by low interest rates, pent-up demand and strong housing values, which is boosting pickup truck sales. "Last month was really strong for trucks -- over 12% share -- and we expect it to be pretty good for full size this month, as well."