The automotive industry saw its strongest year in 2012 since before the recession and momentum has carried over into the first part of 2013.
According to the latest report from TrueCar.com, new light vehicles sales are expected to come in at 1,305,901 units, accounting for a 10.7 percent increase on a year-over-year comparison. The strong sales translate to a Seasonally Adjusted Annualized Rate of 15.3 million new sales, unchanged on a month-over-month comparison and up from 14.1 million in April 2012.
"New car sales continued their stable year-over-year growth curve in April, with improved consumer demand propelling the sales rate above 15 million units for the sixth month in a row," said Jesse Toprak, senior analyst for TrueCar.com. "Relatively lower gas prices coupled with small business demand improving for trucks resulted in a strong showing for small and large pickups in April, a trend we expect to see strengthen even further for the rest of 2013."
The report also showed that retail sales were up 4.2 percent in April on a year-over-year comparison and were up 20.2 percent on a month-over-month comparison. As pent up demand for new cars continues to drive sales forward, automakers are not having to offer as many incentives on current models, because there is no need to attract consumers to dealers as they are already showing up.
Kristen Andersson, analyst for TruCar.com, said that automakers were able to keep incentive spending flat from last month as favorable market conditions are getting people in the door. She added that Toyota's incentive spending dropped to its lowest level in nearly two years.
J.D. Power and LMC Automotive have similar sales predictions
A separate report from J.D. Power and Associates' Power Information Network and LMC Automotive confirms TrueCar.com's sales predictions. According to that report, new retail light vehicles will reach 1,029,000 vehicles in April. Along with pent up demand, favorable economic conditions are making a vehicle purchase affordable for many people.
"The irrepressible buying behavior of consumers is driving auto sales growth in 2013, as consumer spending remains remarkably stronger than the economy suggests it should be," said Jeff Schuster, senior vice president of forecasting at LMC Automotive. "If the current favorable trend in the stock markets and housing continues throughout the year, the automotive market may be poised for a breakthrough performance."