Low gas prices send car buyers to dealerships in April
April showers may yield May flowers, but for automakers, car sales were doing the blooming in the first full month of spring, newly released numbers indicate.
Based on estimates from Woodcliff Lake, New Jersey-based Autodata Corp., new car and truck sales increased by 3.5% in April industrywide, The Wall Street Journal reported. On a seasonally adjusted annual basis, approximately 17.4 million vehicles were bought in the 30-day stretch, further fueling the notion that 2016 could be another record-breaking year for car makers, both domestic and international. Last year was the best period for the industry on record, with sales up 6.1% from 2014, based on estimates from vehicle valuation firm Kelley Blue Book.
Sales surge fueled by low gas prices, affordable financing
Several factors are working in manufacturers' favor, including affordable financing, improved employment numbers – the private sector has seen more than 70 months of uninterrupted job growth – as well as inexpensive gas prices. Generally speaking, travel tends to rise when motorists don't have to spend as much to do it.
Japanese nameplates were particularly popular among the buying public, The Wall Street Journal reported from Autodata Corp. analysis. Approximately 148,829 Hondas were sold, up 14% from the year before. Nissan also saw double-digit growth, a 13% year-over-year increase after selling 123,861 light vehicles.
Two of Detroit's "Big Three" automakers – Ford and Chrysler – witnessed higher sales volume, but the same couldn't be said for General Motors. At 259,557 sales, GM outperformed rivals in Ford and Toyota, but it was still 3.5% behind April 2015's pace, The Journal referenced. It's also the third consecutive instance that sales slipped from the previous month.
New-car prices climb 2 percent
The contraction wasn't enough to slow the pace of transaction prices, however, as robust demand continues to push sticker values to loftier levels. The typical new car in April sold for $33,865, KBB.com reported from its latest sales report. That's up nearly 2% year-over-year and by 0.2% from March. Fiat Chrysler registered the most significant climb in values, up by almost 5% from the same period in 2015. Of the brands that it produces, Dodge led the way, with prices ascending by just shy of 5%.
Tim Fleming, Kelley Blue Book Analyst, noted how buyers were keen on trucks, mid-size especially.
"This segment is on the rise, as consumers who don't need a full-size truck are finding they can still get many amenities and plenty of utility from the new mid-size trucks now available," Fleming said.
The typical mid-size pickup sold for right around $31,600 last month, according to KPP's breakdown of ATP data. They had been going for $29,600 two Aprils ago.
Sport-utility vehicles sales, meanwhile, have soared to new heights, especially for the Ford Motor Co. The company announced the segment has never had a better April than this past one, after moving 65,000 SUVs. Should they continue to be bought at the same pace, Ford says 2016 could go down as its best year since entering the SUV market.