April US auto sales, due to be announced next week, were expected to reveal “a very hot new vehicle market”, Cox Automotive said.
The April sales pace was expected to finish near 16.5m, down from last month’s “robust” 17.7m but still a healthy pace for the industry.
March sales were especially strong due in part to some February sales being delayed as a result of bad weather (msotly in Texas) and resulting power outages. The extra boost which benefited March was not likely to be seen in April.
Sales volume was expected to finish near 1.36m, up nearly 640,000 units, a near 90% increase from last April’s historic low COVID-19 infected result.
Given the shock to the market last spring, a better comparison to measure the strength of the market is calendar year 2019, the last year the industry saw a 17m market. Versus April 2019, vehicle sales were expected to increase more than 30,000 units, or 2.3%, which suggests automobile sales were normalising. There is the same number of selling days this month as last month (26) and last April; however, there is one more than in April 2019.
A year ago the sales pace reached a historic low of 8.7m, the slowest monthly pace in nearly 50 years. Growing consumer confidence and additional government financial support since then have lifted new vehicle demand.
Charlie Chesbrough, senior economist, Cox Automotive, said: “There is little reason to expect buyer interest to wane anytime soon given recent economic growth rate expectations and improvements to consumer sentiment. But inventory is a huge problem in the vehicle market – a lingering result of the COVID-19 shock last year.”
Production shutdowns and supply chain disruptions had left dealers with too few vehicles. Limited inventory was a major challenge for the vehicle market and likely to dampen sales activity in the coming months. There were nearly 1.1m fewer vehicles in inventory at dealerships this April versus last April, and this tight supply situation would constrain sales.
Colour choices and trim packages would be limited as well, so much so that some buyers might decide to postpone purchasing if they can’t get exactly what they want.