I have been particularly interested in April's car sales number, as it will be the first since January that won't be distorted by events at Toyota. In February annualized sales were 10.3m (as Toyota's sales fell dramatically). March's 11.8m annualized sales were fueled by the resulting Toyota incentives. Additionally, Spencer at Angry Bear contends that, as gas prices go up as a share of disposable income, car sales go down. So, have rising gas prices taken a bite out of auto sales?
Yesterday Edmunds.com reported (finally!) its preliminary estimate of auto sales for April 2010:
This month's new vehicle sales (including fleet sales) ... are expected to be 988,100 units, a 20.9 percent increase from April 2009 and a 7.1 percent decrease from March 2010....This conflicts sharply with the rumors coming out of Satwaves (Satellite Radio news and information), which had reported that:
"In March, incentives really helped boost car sales — especially [for] Toyota.... In April incentives averaged nearly $200 less per vehicle industry-wide and sales fell along with incentives." ....
Edmunds.com analysts predict that April's Seasonally Adjusted Annualized Rate (SAAR) will be 11.2 million, down from 11.8 in March 2010.
According to another Satwaves source, sales are off the charts across the board with Ford (NYSE:F) once again posting exceptional sales numbers, especially Taurus and Fusion sales. My source indicated that the SAAR rate could surpass the 14 million unit mark when the April sales numbers are reported. Such a number would dwarf Sirius XM Radio’s (NASDAQ: SIRI) guidance of 10.5 million, as well as analyst estimates of just 11 million units.
Edmunds' estimate should be taken with several grains of salt, as it is frequently off by a million or more units annualized. Satwaves' 14m estimate should probably come with an entire shaker.
Nevertheless, if true, Edmunds' estimate must be regarded as a good number, as most of the sales increase held after incentives were greatly reduced. Additionally, if true it means that gasoline prices have not yet caused a reversal of the improving trend in car sales.