What a difference a day makes, at least in April 2024.
Total new-vehicle sales transactions that month are projected to reach 1,304,600 vehicles, down 0.9% from April 2023, which had one more selling day than this April. The selling day-adjusted data from J.D. Power and GlobalData includes retail and non-retail (fleet) sales.
“April is showing mixed results, with an increase in retail sales offset by a decline in sales to fleet buyers,” says Thomas King, president of J.D. Power’s data and analytics division. “This is a notable change from recent months in which manufacturers have increased fleet sales. Although sales to retail buyers are rising, the rate of growth is modest.”
J.D. Power reports that manufacturers’ incentives and the deterioration of used-vehicle values, which translate into less trade-in equity, are among the reasons for the decline.
“Total retailer profit per unit – which includes vehicle gross plus finance and insurance income – is expected to be $2,588, down 29.8% from April 2023,” says King. Rising inventory is the primary factor behind the profit decline, and fewer vehicles are selling above the manufacturers' suggested retail prices (MSRP). Thus far in April, only 16% of new vehicles have been sold above MSRP, which is down from 30.5% in April 2023.”
New-vehicle retail sales for April 2024 are expected to increase compared to April 2023. Retail sales of new vehicles are expected to reach 1,084,900 units, a 2.1% increase on a selling day-adjusted basis. In addition, retail inventory is expected to finish around 1.8 million units, a 3.2% increase from March 2024 and a 40% increase from April 2023. Fleet mix is projected at 16.8%, down 2.5 percentage points from April 2023 and down 13.6% on a selling day-adjusted volume basis.
This month’s total retailer profit from new-vehicle sales is projected to be $2.7 billion, down 30.5% from April 2023.
“Rising inventory means fewer vehicles are being pre-sold by retailers, with more shoppers able to buy directly off dealer lots. This month, J.D. Power projects that 33.2% of vehicles will sell within 10 days of arriving at the dealership, down from a peak of 58% in March 2022. The average time a new vehicle remains in the dealer’s possession before sale is expected to be 44 days, marking a 14-day increase from a year ago.
So far in April, the average used-vehicle retail price is $28,491, reflecting a 4.5% – or $1,347 – decrease from a year ago. The decline in used-vehicle values translates to lower trade-in equity for owners, now trending toward $8,004, down $1,330 from a year ago.
“May is traditionally one of the larger sales months of the year, facilitated by Memorial Day promotional activity and discounts from manufacturers. In recent years, with low inventories and high demand, holiday sales incentives were scarce,” says King. “However, with inventories increasing and competition intensifying, shoppers could benefit from brands eager to move inventory.”
Consider these other data points from the analysis:
- The average new-vehicle retail transaction price in April is expected to reach $45,093, down $1,172 from April 2023. The previous high for any month – $47,329 – was set in December 2022.
- Average incentive spending per unit in April is expected to reach $2,633, up from $1,680 in April 2023. Spending as a percentage of the average MSRP is expected to increase to 5.3%, up 1.9 percentage points from April 2023.
- Average incentive spending per unit on trucks/SUVs in April is expected to be $2,765, up $1,007 from a year ago, while the average spending on cars is expected to be $2,129, up $737 from a year ago.
- Retail buyers are on pace to spend $46.4 billion on new vehicles, down $1.7 billion from April 2023.
- Trucks/SUVs are on pace to account for 79.2% of new-vehicle retail sales in April.
- Fleet sales are expected to total 219,687 units in April, down 13.6% from April 2023 on a selling day-adjusted basis. Fleet volume is expected to account for 16.8% of total light-vehicle sales, down 2.5 percentage points from a year ago.
- Average interest rates for new-vehicle loans are expected to increase to 7%, 20 basis points higher than a year ago.
