PREVIEW U.S. APRIL AUTO SALES: Will Rebound Help Calm Concerns?
(Bloomberg) -- U.S. April light vehicle seasonally adjusted annual rate (SAAR) estimate 17.1m vs 17.4m y/y. Analysts say the key question is if a rebound in auto sales from disappointing March levels will be enough to alleviate broader industry concerns of weaker used car pricing, rising inventories and higher incentives.
- Most automakers report monthly sales Tuesday pre-market
- See Bloomberg estimate chart
- GM supply chain; Ford supply chain; FCAU supply chain
- Bloomberg Intelligence primers for GM, Ford, Fiat Chrysler
- BI credit primers for GM, Ford, Fiat Chrysler
- 1Q results GM, Ford, Fiat Chrysler
ANALYST COMMENTARY:
- JPMorgan (Ryan Brinkman): U.S. light vehicle SAAR likely to rebound to over 17m in April, represent a significant reacceleration vs March and providing some reassurance to investors; incentives remain higher y/y through first 20 days of April, although pace of y/y increase appears to be moderating
- RBC (Joseph Spak): Question is if recovery in SAAR will be enough to stem and/or reverse the negative sentiment; says would be “surprised if an improved April SAAR print is enough to calm down industry concerns”
- Barclays (Brian Johnson): An April SAAR rebound to 17m+ is important, as investors seeking some comfort that March SAAR of 16.6m did not mark the next significant step down in the cycle; says debate is not whether or not cycle will get worse, but if the cycle will be more of a gradual erosion, or if cycle is in imminent danger
- Buckingham (Glenn Chin): Sees GM “slightly” outperforming industry sales, due to elevated incentive spending and Ford to underperform, losing ~40 basis points of market share y/y; sees both GM and Ford shares could come under pressure as it would be 4th month of stagnant auto sales and could deepen concern about industry pricing
- Edmunds (Jessica Caldwell): Sees April SAAR of 17m, representing a 4% decrease y/y; “These year-over-year declines may become more typical as the year progresses, but there’s no reason to be in panic mode. Historically, car sales are still strong”
ESTIMATES:
- Big 3 ests.:
- GM: -2%
- Ford: -4.7%
- Fiat Chrysler: -5.9%
- Other ests.:
- Toyota: -4.2%
- Honda: -5.3%
- Nissan: +1.5%
- Hyundai/Kia: -5%
- Volkswagen/Audi: -0.4%
- NOTE: April 2017 had 26 selling days vs 27 y/y
RELATED:
- Earlier, Incentive Surge Comforts April Auto Sales After March Scare: BI
- Earlier, A $50,000 Chrysler Minivan Explains Slowing U.S. Auto Sales
- April 28, GM Truck and SUV Build Boosts Profit as Plant Shutdowns Loom
Alert:
HALISTER1Source: BFW (Bloomberg First Word)
Tickers 005380 KS (Hyundai Motor Co)
F US (Ford Motor Co)
FCAU US (Fiat Chrysler Automobiles NV)
GM US (General Motors Co)
7267 JP (Honda Motor Co Ltd)
People Brian Johnson (Barclays PLC)
Glenn Chin (Buckingham Research Group)
Jessica Caldwell (Edmunds.com)
Joseph Spak (RBC Capital Markets)
Ryan Brinkman (JPMorgan Chase & Co)
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