Have Auto Sales Stalled or Did They Drive Higher in April?

Forecasts predict an increase in April's new-vehicle sales, but which automakers are expected to lead the charge?

Apr 29, 2014 at 3:30PM

The automotive industry started the year slower than expected after harsh winter weather froze sales at dealerships across the nation. As sales slowed, a growing number of analysts wondered if it was a sign of weakening demand after years of consistent growth. That sentiment reversed quickly as sales rebounded strongly in March, and if April goes as planned, it should further reinforce that new vehicle demand remains healthy. Here's what automotive investors can expect when April sales are released Thursday, May 1, and one key segment to watch.

April forecast
New vehicle sales in the U.S. market are expected to rise 8.5% in April, compared to last year, as a typically strong spring selling season is under way, according to J.D. Power and LMC Automotive. The forecast expects annualized sales to reach 16.1 million vehicles in April, which is far ahead of last year's 15.2 million level.

A separate forecast from Edmunds.com expects sales to increase slightly higher, a 9.1% increase for an annualized rate of 16.2 million vehicles. Using this forecast, you can see the rebound from this year's initial sales decline.

Source: Automotive News DataCenter. April 2014 projected from Edmunds.com forecast

Edmunds expects America's two largest automakers, Ford (NYSE:F) and General Motors (NYSE:GM), to post sales increases of just under 5% in April, compared to last year. On the other end of the spectrum, Toyota (NYSE:TM) and Nissan are expected to post significant sales increases of 14% and 17.9%, respectively.

"Auto sales are hitting their stride as the spring selling season begins, and the pace has returned to the level expected at this stage of the recovery," said Jeff Schuster, senior vice president of forecasting at LMC Automotive, according to Reuters. "Fueling the growth further as the year progresses is a very robust level of new-model activity, with 63 new or redesigned models expected to hit showrooms, a 60 percent increase from last year."


The most important sales results will be found in the full-size truck segment. Photo: General Motors Silverado

What to watch
One vital sales segment investors should be watching in April is the full-size truck segment, which will likely continue to outpace the overall industry in growth. Through the majority of the first quarter General Motors refused to increase its incentives on its newly redesigned Silverado and Sierra, and it caused sales to spiral double digits.

That changed in March when America's largest automaker decided to unleash steep incentives on the two full-size trucks. The strategy sent sales of the Silverado and Sierra up 7% and 22% last month, respectively. GM apparently liked the look of that sales increase and decided to offer its "truck month" a second time, in April.

It will be interesting to see if GM's full-size trucks stole the thunder from Chrysler's Ram trucks for the second straight month and it will be of high importance to investors, as full-size trucks represent significant profits for automakers. Also, not to be forgotten, is Ford's F-Series, which remains the best-selling vehicle in America despite being the oldest design of competing full-size trucks. Ford's F-Series will soon be the freshest redesign when its 2015 model is launched at dealerships shortly. It is possible increased incentives on the older F-Series models, in preparation to clear lots for the new model, could also eat into the Ram's and Silverado's piece of the pie. 

Are you ready to profit from this $14.4 trillion revolution?
Let's face it, every investor wants to get in on revolutionary ideas before they hit it big. Like buying PC-maker Dell in the late 1980s, before the consumer computing boom. Or purchasing stock in e-commerce pioneer Amazon.com in the late 1990s, when it was nothing more than an upstart online bookstore. The problem is, most investors don't understand the key to investing in hyper-growth markets. The real trick is to find a small-cap "pure-play" and then watch as it grows in EXPLOSIVE lockstep with its industry. Our expert team of equity analysts has identified one stock that's poised to produce rocket-ship returns with the next $14.4 TRILLION industry. Click here to get the full story in this eye-opening report.

Daniel Miller owns shares of Ford and General Motors. The Motley Fool recommends Ford and General Motors. The Motley Fool owns shares of Ford. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Money to your ears - A great FREE investing resource for you

The best way to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as “binge-worthy finance.”

Feb 1, 2016 at 5:03PM

Whether we're in the midst of earnings season or riding out the market's lulls, you want to know the best strategies for your money.

And you'll want to go beyond the hype of screaming TV personalities, fear-mongering ads, and "analysis" from people who might have your email address ... but no track record of success.

In short, you want a voice of reason you can count on.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich," rated The Motley Fool as the #1 place online to get smarter about investing.

And one of the easiest, most enjoyable, most valuable ways to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as "binge-worthy finance."

Whether you make it part of your daily commute or you save up and listen to a handful of episodes for your 50-mile bike rides or long soaks in a bubble bath (or both!), the podcasts make sense of your money.

And unlike so many who want to make the subjects of personal finance and investing complicated and scary, our podcasts are clear, insightful, and (yes, it's true) fun.

Our free suite of podcasts

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. The show is also heard weekly on dozens of radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable. Rule Breaker Investing and Answers are timeless, so it's worth going back to and listening from the very start; the other three are focused more on today's events, so listen to the most recent first.

All are available for free at www.fool.com/podcasts.

If you're looking for a friendly voice ... with great advice on how to make the most of your money ... from a business with a lengthy track record of success ... in clear, compelling language ... I encourage you to give a listen to our free podcasts.

Head to www.fool.com/podcasts, give them a spin, and you can subscribe there (at iTunes, Stitcher, or our other partners) if you want to receive them regularly.

It's money to your ears.


Compare Brokers