No Surprises In March Auto Sales Numbers
Ford's sales rise mostly from fleet, while all four brands at GM notch double-digit sales increases.
Automakers reported March U.S. light-vehicle sales on April 3 that gave us no new concerns about the health of the U.S. auto industry. The seasonally adjusted annualized selling rate was 17.49 million versus 16.82 million in March 2017. Total sales grew 6.4% year over year to 1.66 million, but we calculate a 2.6% rise adjusting for one extra selling day this March. Incentives are likely still high based on recent dealer comments, GM’s incentive spending as a percentage of average transaction prices at 14.5%, and ALG estimating industry incentives increased 8% versus March 2017 (to $3,750 per unit); however, we don't see a reason to change our 2018 sales forecast of 16.6 million to 16.8 million. We expect consumers to keep gravitating to used vehicles due to the continued surge of off-lease volume this year. Balanced against that on the new side will be consumers desire to have the latest tech and safety features as well as a preference for light-truck models. GM’s new generation of crossovers position it well to capitalize on this mix shift. GM also announced it will stop reporting monthly sales and only report quarterly. We are fine with this move as we think monthly sales receive more attention than they deserve, and we agree with GM that trends are more visible in quarterly data than in monthly.
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