U.S. auto sales decline year-on-year in April, rises slightly on sequential basis

The U.S. auto sales disappointed in April. Sales came in at 16.88 million units in the month on a seasonally-adjusted basis, well below the 17.3 million units registered one year ago. It was a slight increase from 16.5 million units in March.

Declines on a year-on-year basis were broad based, with sales of most brands down in the month. Hyundai was the only automaker that registered a gain out of the top eight selling brands. It recorded a sales growth of 1 percent.

Nissan and Toyota witnessed smallest drops of 2 percent and 4 percent respectively, while the remaining five brands registered drops in the 6 percent to 7 percent range. Passenger cars dropped 12 percent year-on-year, whereas light trucks remained flat in the month.

Auto sales have evidently lost momentum following a strong end to 2016. The weak reading for the month of April, along with a weak handoff from March, implies that auto sales might be a drag on consumer spending again in the second quarter, stated TD Economics in a research report.

The weaker pace sales came in spite of increased incentive spending, implying that underlying demand is easing. This is not surprising, given the stellar performance of sales in recent years, and the fact that pent-up demand has been satiated, said TD Economics. Auto sales have definitely decelerated, but the average rate of sales in 2017 is still above 17 million.