Motor Vehicles Sales in April 2010

Released on 5/3/2010 For Apr, 2010 Prior Consensus Consensus Range Actual Domestic Vehicle Sales 8.8 M 8.8 M 8.4 M to 8.9 M 8.5 M Highlights Despite a significant easing in incentives, vehicle sales proved resilient in April and compare well with a very strong March that was boosted by unusually aggressive incentives. April total sales came in at an annualized rate of 11.2 million units, down 5 percent from March. Sales of domestic-made units totaled 8.5 million vs. March's 8.8 million with sales of imported light vehicles at 2.7 million vs. 3.0 million in March. Month-to-month weakness is centered in the lower cost car component not light trucks which show a smaller dip, this along with less aggressive incentives will limit the dollar decline in retail sales data. Though the results do point to weakness for the motor vehicle component of the April retail sales report, they nevertheless offer a further indication that consumers are out shopping.  Market Consensus Before Announcement Sales of domestic light motor vehicles in March rose to an annual unit rate of 8.8 million, up 14 percent from February's 7.7 million rate. Sales of imports also were healthy, rising to 3.0 million units annualized from 2.7 million in March. Combined sales of domestics and imports jumped to 11.8 million from 10.4 million in January. Slowly improving optimism about the economy may keep nudging consumers with jobs to upgrade their rides, meaning likely continuing gains-albeit modest-in vehicle sales.  Definition Unit sales of domestically produced cars and light duty trucks (including sport utility vehicles and mini-vans). Individual manufacturers report usually report sales on the first business day of the month. Motor vehicle sales are good indicators of trends in consumer spending.  Why Investors Care   Motor vehicles sales slowed notably in 2006 as a result of higher interest rates and a jump in gasoline prices but remained at reasonable levels due to strong income growth. Late in 2006 and in early 2007, gasoline prices were down from 2006 highs but moderating economic growth kept sales from rebounding. Truck shares hit their peak in 2005 when gasoline was cheap and remain sharply lower since gasoline prices spiked in 2006. Data Source: Haver Analytics