April wasn’t a good month for auto sales. In fact, they crashed 6.1 percent marking the worst slide in 8 years.
And this decline wasn’t just in the U.S., but globally.
This was the biggest monthly drop since May 2011 — “to just 16.4 million units, the lowest since October 2014. Aside for an incentive-boost driven rebound in March, every month of 2019 has seen a decline in the number of annualized auto sale,” Tall Market reported.
The news is bad overall. Cars are becoming unaffordable for many. The average price of a new car in April came in at $36,720, the highest ASP so far this year, The Detroit News reported. Interest rates currently remain above 6 percent on average, which has drastically affected sales.
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“April sales were a bit dampened by the harsh financing conditions we’ve been seeing in the new-car market. Shoppers are really starting to feel the pinch as prices continue to creep up and interest rates loom at post-recession highs,” Edmunds analyst Jessica Caldwell said.
Of the automakers, Nissan was the one manufacturer that did not see a decline. It actually saw a 9 percent increase. Ford’s U.S. sales dropped 4.7 percent, according to Automotive News. Fiat Chrysler decreased 6.1 percent. The company has seen three straight months of U.S. sales decline. Meanwhile, Toyota sales fell 4.4 percent, while the Corolla sedan saw a 32.8 percent drop and its Camry fell 2.1 percent.
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But some industry observers say things aren’t as bad as they seem. According to a J.D. Power analysis, auto sales fine at the more profitable, high end of the market.
“With the volume contraction focused of the low end of the market, the dip in industry retail sales poses a smaller threat to OEM profitability than headline sales results suggest,” said Thomas King, senior vice president, Data and Analytics Division at J.D. Power, in a report on April 26.
Looking closer, there are cars that are selling well — especially high-end cars and trucks.
“J.D. Power expects April auto sales of about 1.4 million cars and trucks, a decline of about 3.5% vs. April 2018 based on the daily selling rate, when automakers in the U.S. market report April sales on May 1. Most of that decline comes from cheaper vehicles, the company said,” Forbes reported.