Cox Automotive Forecasts April Auto Sales
April 26, 2019—Cox Automotive is forecasting April U.S. auto sales to cool off to 1.37 million units, a 1 percent increase over last year's volume. However, because the number of selling days increases from 24 last April to 26 this year, the seasonally adjusted annual rate (SAAR) of sales is expected to decline to 16.9 million units, down from April 2018's pace of 17.2 million and last month's strong 17.5 million pace.
Cox Automotive expects the vehicle market to return to a more modest sales pace in April and continue on a sales path that is below last year's 17.3 million to finish near 16.8 million in 2019.
"March's SAAR of 17.5 million was a big surprise for industry analysts," said Charlie Chesbrough, senior economist, Cox Automotive. "Most market watchers were expecting the sales pace last month to continue at the mid-16 million level seen in January and February. However, delayed purchasing from a severe winter and aggressive fleet activity lifted March sales much higher than expected."
The largest variable in April, and throughout 2019, is fleet volume. Sales of both commercial and rental fleet vehicles have been on the increase, and this trend is likely to continue throughout 2019. Total fleet sales increased nearly 8 percent in 2018 versus year-earlier levels while retail sales decreased 1 percent. This trend toward more fleet, less retail is continuing this year.
One key contributing factor to the strength in fleet sales may be changes in tax law resulting from the Tax Cuts and Jobs Act of 2017. Depreciation allowances for business-use vehicles were increased significantly by the new laws and, as a result, more fleet activity and business-use vehicle purchases are likely to continue in 2019 as more businesses consider the full benefits of the tax changes.
April 2019 Sales Forecast Highlights
- New light-vehicle sales volume is forecast to decrease by nearly 250,000 vehicles versus March, down 15 percent.
- Sales, including fleet, are expected to reach 1.37 million units, up 1 percent from April 2018.
- The April 2019 SAAR is forecast to be 16.9 million, down from last year's 17.2 million pace and down from last month's surprising 17.5 million level. This month features 26 selling days, 2 more than last April, which is the key factor for why sales volume can increase while the sales pace decrease.
- Record volume for April occurred in 2005, with sales of 1.5 million and a SAAR of 17.3 million.