U.S. new car sales had been in a bit of a slump in the first two months of this year before March rode to the rescue and pushed sales higher on a seasonally adjusted annual rate (SAAR) basis. April sales will do no better than to hold the ground gained in March.

Adjusted to account for selling days, new car sales are forecast to dip month over month by more than 237,000 units to 1.05 million from a March total of 1.28 million. Year over year, sales are forecast to be down 1.3%.

The April forecast was released Thursday morning by J.D. Power and LMC Automotive. This month has two fewer selling days than did April of 2017.

J.D. Power executive Thomas King said:

Although April sales will be underwhelming, it’s important to note that both March and April results are affected by quirks in the industry sales calendar. March benefited from an extra weekend this year, while April sales have been negatively affected by having one less selling weekend compared to 2017. When looking at the two months combined, retail sales will be down only modestly from last year.

The larger concern is incentive spending by automakers and dealers to help boost sales. According to the J.D.Power-LMC Automotive tracking of sales incentives for the month to date, average spending is up $187 year over year to $3,698. Incentives on trucks and sport utility vehicles are up $426 year over year, while incentive spending on cars is down $226.

Jeff Schuster of LMC Automotive noted:

Uncertainty and unfavorable factors appear to be mounting for autos, including a volatile stock market, rising interest rates, rising oil prices and potential trade roadblocks. But the auto industry is resilient and disciplined. It’s shrugged off most of the concerns to date. Going forward, it wouldn’t take much to turn delicate stability into more pronounced pullback. Keep an eye on the economy after 2018, as signals are increasing that a mild recession could be on the horizon.

The two firms also note the following data points:

• The average new-vehicle retail transaction price to date in April is $32,544, a record for the month, surpassing the previous high for the month of $31,414 set in April 2017.
• Consumers are on pace to spend $34 billion on new vehicles in April, $2 billion less than last year’s level.
• Trucks account for 67% of new-vehicle retail sales through April 22—the highest level ever for the month of April—making it the 22nd consecutive month above 60%.
• Days to turn, the average number of days a new vehicle sits on a dealer lot before being sold to a retail customer, is 68 through April 22, down two days from last year.
• Fleet sales are expected to total 267,000 units in April, up 4.6% from April 2017.  Fleet volume is expected to account for 20% of total light-vehicle sales, up from 19% last year.

LMC Automotive continues to forecast full-year sales of light vehicles at 17 million units, down 1.1% compared to 2017. Full-year retail sales of new cars are forecast at 13.8 million units, down 1.6% year over year.

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