Auto Sales Dive: Second Quarter Retail Spending Off to Bad Start

Auto sales took a dive in April. This is our first glance at second-quarter consumer spending strength.

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.

April Auto Sales offer our first glance at a consumer demand.

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

MarketWatch comments on Weak Demand Despite Strong Incentives.

  • 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.

GDPNow Spotlight

GDPNow is off to it's typical robust start: Here We Go Again: GDPNow Projects 4.1% GDP

Once again my typical mental wager on the GDPNOw initial forecast is as follows: "I'll take the under, way under".

Weak Start

Auto sales offer a hint that forecast may be correct.

Inflation Scare

Inflation concerns may soon give way to something far different. For discussion, please see Velocity of Money Picks Up: Inflation Coming? Stagflation? How About Deflation?

Mike "Mish" Shedlock

Comments (13)
No. 1-13

My car is now coming on 13 years of age. It works well and other than blue tooth and USB there's really no technology I find lacking in the car. The U.S. auto industry should be worried because the way the car is running I have no intention of buying a new one anytime soon.



Yes cars are lasting a lot longer now, as well as getting much better mileage. That cannot be good for car sales, but if one company makes better cars the others have to keep up or go out of business. It was not that long ago a car was worn out at 100k miles. I know a guy with a 1988 Ford F-250 diesel that has over a million miles on the original engine, and the truck looks like it is good for a million more.


How can Consumer demand and growth continue when we have rising interest rates, along with a rising dollar, rising rents, rising house prices with increasing property taxes, rising health care costs, can’t forget car payment along with insurance costs, record credit card debt, rising gasoline prices isn’t tuition still moving up, are food costs still going up maybe increase in liquor consumption but that’s on the credit card and whatever else I’m leaving out, so that the consumer must still b spending meager savings, and just keep taking on debt they know they can never pay back because of an attitude problem they are experiencing as they watch the 1% increase their wealth so the the hell with it kind of thinking.


I was expecting a short term bump to auto sales as consumers rushed to buy before the steel tariffs push prices significantly higher. The absence of a bump can't be a good sign.