This Tweet caught my eye today.
Advance retail sales for April have not been posted. The pickup was March, the last month of the first quarter. It's a huge mistake to assume a March pickup will represent the second quarter.
Dismal April Car Sales
- Ford Motor posted a 4.7-percent decline in sales, with retail sales to consumers down 2.6 percent. Pickup trucks were up 0.9 percent, but SUV and passenger car sales were down 4.6 percent and 15 percent respectively.
- Nissan Motor's sales hit quite a bump, plunging 28 percent in April. Nissan cars dropped nearly 35 percent and SUV and truck sales were down 23.1 percent. Even sales of the company's popular SUV crossover model Rogue were down almost 15 percent.
- General Motors announced last month that it would no longer report monthly sales and instead will just post sales on a quarterly basis. But industry estimates showed the company posting a monthly decline for April of anywhere up to 8 percent.
- Toyota posted a 4.7 percent decline in sales for April, with a 1.5 percent increase in SUV and pickup truck sales offset by a 12.7 percent drop in passenger car sales. Sales of the company's recently revamped flagship Camry sedan were down 5 percent.
- Fiat Chrysler Automobiles (FCA) posted an overall sales increase of 5 percent in April. But retail sales to consumers were down 1 percent while lower-margin fleet sales to rental car companies and government agencies were up 5 percent.
Sales Down, Incentive Up
- Auto makers spent about $3,700 per vehicle in discounts and other incentives in April, about 5% higher than a year earlier, according to research firm LMC Automotive. But the deals were heavily tilted toward crossovers and SUVs, while incentives on car models declined.
- It is a sign the price pressure that has hurt profitability in car categories in recent years could be spreading to more-lucrative segments like crossover SUVs.
- Fuel prices also are creeping higher. Average regular retail gas prices reached $2.80 last week, according to the U.S. Energy Information Administration, the highest since 2015. Prices are expected to rise and could top $3.00 through the summer driving season.
Retail spending for the second quarter is off to a very slow start.
Once again my typical mental wager on the GDPNOw initial forecast is as follows: "I'll take the under, way under".
Auto sales offer a hint that forecast may be correct.
Mike "Mish" Shedlock