Purchases of motor vehicles totaled 16.4 million units (SAAR) in April after 17.4 million units in March and matched the 16.4 back in February. There may have been some pent-up demand to be exercised in March that was quickly exhausted by the following month. The current year has plenty of room to run and it may be that consumers will pick up the pace for buying cars and trucks in coming months. At present, 2019 is off to a slow start compared to last year.
Over two-thirds of vehicle purchases are for domestically produced units. While fewer units are being built, they are not giving up market share to foreign vehicles.
In spite of increases in gasoline prices — which can have an impact on the choice of vehicle — a majority of consumers opted for a vehicle in the pricier and less fuel efficient category of light trucks which include SUVs, crossovers, and minivans. Of the 16.4 million units, 4.8 million were passenger cars and 11.6 million were light trucks. This proportion of about 30%-70%, respectively, has remained the case for the past year. While gasoline prices remain relatively low and incomes on the rise, this should not change. Consumers will start to shift back to passenger cars if the price at the pump for regular gas starts to exceed $3/gallon.
The decline in motor sales will mean that the April numbers on retail and food sales will not get much support from autodealers when the report is issued at 8:30 ET on Wednesday, May 15. However, spring weather, tax refunds, higher gasoline prices, and a major holiday should contribute to keeping sales excluding autos reasonably firm.
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