Industry analysts are expecting a bright start to second quarter auto sales, with April generating a seasonally adjusted annual sales rate (SAAR) of up to 14.5 million vehicles.
While showing a decrease from last months’ total sales of 1.4 million – data collected by Truecar.com estimates 1,195,809 vehicles sold, a solid 3.4 percent increase over sales in April 2011.
“I’m inclined to think that second quarter is going to pick up speed,” said Bill Cheney, chief economist for Manulife Asset Management.
With gas prices dropping back down, Americans will continue to shop around for smaller, fuel-efficient replacements for their aging autos – many of which are between 10 and 11 years old. And while incentive spending has decreased since March, General Motors and Chrysler are offering an average of over $3,000 per vehicle – so there are plenty of good deals to be found on the retail side.
Additionally, the economy added 120,000 jobs and unemployment appears to be holding steadily at 8.2 percent. This means consumer confidence is up and will join forces with warm weather to continue fueling sales.
As usual, GM appears to be leading in unit sales with 209,399 cars and light trucks sold, with Toyota and Ford Motor Company close behind at 183,096 and 181,898, respectively.
While GM will likely maintain the largest slice of the market share at 17.5 percent, Toyota may edge out Ford at 15.3 percent by a tenth of a percentage point. All together, the big three will capture 48 percent of the U.S. market share.
Chrysler, called the auto industry’s “come back kid” earlier this year, will continue to show strong improvement. Estimates put sales for the former auto giant at 138,025 – a 17.7 percent year over year increase. The company is expected to take about 11.5 percent of the domestic market share.
American Honda and Hyundai/Kia are battling for around 9.5 percent of the market share each – with Honda selling just over 115,000 vehicles and Hyundai/Kia selling close to 113,000. But Hyundai may be the real winner – offering an average incentive of $1,223, about half of what Honda spent per vehicle. And with the highest average increase in ticket price over the last year, Hyundai/Kia is even more profitable.
Volkswagen will sell over 40,000 vehicles – continuing it’s slow but steadily increasing share of the U.S. market to 3.6 percent, up from 3.4 in March.
Even on the low end of the monthly forecast estimates, Joe Brusuelas, a senior economist for Bloomberg, L.P., kept a positive attitude about his predicted SAAR of 14.1 million vehicles.
“Sales will remain solid [throughout the year],” he said.