U.S. auto sales in April are expected to rise 7% and the annual sales pace should top 15 million vehicles for the sixth straight month as consumers remain positive about the economy, J.D. Power and Associates and LMC Automotive said today (April 19).
Reuters reported that sales of new cars and trucks in April are expected to climb to more than 1.3 million vehicles, while the annual sales pace is forecast to reach 15.2 million vehicles, the research firms said in their monthly forecast. Since November, the annual rate has ranged from 15.3 million to 15.5 million.
Auto sales are an early indicator each month of economic health. The industry has so far proven stronger than the overall U.S. economy as the record high age of cars and trucks on the road has reached more than 11 years, and easier availability of credit have pushed consumers into the market.
“The irrepressible buying behavior of consumers is driving auto sales growth in 2013, as consumer spending remains remarkably stronger than the economy suggests it should be,” Jeff Schuster, senior vice president of forecasting at LMC, said in a statement.
“If the current favorable trend in the stock markets and housing continues throughout the year, the automotive market may be poised for a breakthrough performance,” he added.
The forecast said strong sales are being complemented by the ability of automakers to increase their prices to boost profit margins.
Consumer-facing transaction prices are up 3.1%, which equates to an extra $13.2 billion spent on new vehicles through the first four months of the year, J.D. Power said. The average price of used vehicles sold at dealers has also risen 3.8% so far this year.
“The strong used-vehicle prices we’re seeing are supporting new-vehicle demand and are reflective of the general pricing discipline being exhibited by new-vehicle manufacturers,” said John Humphrey, senior vice president of the global automotive practice at J.D. Power.
“Industry sales are also benefiting from an increase in the number of maturing vehicle leases, a trend that will continue throughout 2013,” he added.
The U.S. auto sector is scheduled to report April sales results on May 1. In March, sales rose 3.4% — in line with expectations — as rising home prices and an increase in housing construction spurred demand.