This year’s brisk first quarter auto sales will show signs of slowing when April numbers are released early next week, experts say.
“It’s nothing too drastic, but we’re looking at some deceleration,” said Max Clarke, chief U.S. economist with Singapore-based IDEAglobal Ltd. His company has scaled back their annualized predictions from 13.06 million autos sold to 12.8 million, based on the sluggish sales they saw in April.
Edmunds.com, an online research firm, predicts that around 171,000 cars have been sold throughout the month of April, said analyst Jessica Caldwell, a senior analyst at online research firm Edmunds.com.
That number would represent an increase of almost 20% from last April, but a decrease of 6% compared to last month, she said.
The expected dip is largely a seasonal phenomenon, Caldwell said. Every year, April brings numbers that are disappointing relative to those from earlier months. This is partly because April often acts as a bridge from first quarter incentives, or deals offered to consumers, to a new batch of sales that will mark the beginning of summer.
Still, some analysts believe that low April numbers should be seen as a serious warning sign. They see low sales this month as a forecast of furhter problems down the line for manufacturers experiencing parts shortages related to the February earthquake and tsunami in Japan.
While those shortages have been a source of concern for dealerships already, the fallout won’t show up in sales numbers until late May or even June, Caldwell said.
Those shortages will affect Toyota, Honda, and Nissan the most out of all U.S. suppliers, as those manufacturers are the most heavily reliant on Japanese factories for production.
Toyota has already suffered serious losses from the effects of the earthquake and tsunami, having lost thousands of cars during the disasters and felt the strain on inventory already this month, especially in regards to its popular Prius model. Toyota representatives have said those shortages will be cleared up by October, but the intervening months leave
plenty of time for them to hurt the company’s bottom line.
The composition of April sales will show a continued trend toward smaller and more fuel-efficient vehicles, most analysts agree.
Last month saw a significant increase in hybrid sales, which jumped almost a full percentage point from 0.2% of the fleet to almost 0.3%, Edmunds.com’s Caldwell said. That spike was due to notoriously high and rising gas prices, which have pushed consumers into more fuel-efficient vehicles.
For the same reason, compact and sub-compact auto sales are expected to remain strong in April. But while those smaller models look more and more appealing for their savings on gas, midsized vehicles remain a popular classic.
“Not everyone can go from large to compact, so midsize fits a lot more people’s preferences,” she said.