US April new car, motor vehicle sales slip on subdued economic activity

The United States witnessed a drop in the April new car sales across all major categories including passenger vehicles, SUVs and other vehicles. On an annual basis car sales were up 2.4 pct. Despite witnessing a fall in the month, the number of new motor vehicle sales remain at an historic high and just 3.0% pct lower than an all-time high set in September last year, reports said.

The breakdown demonstrated a 1.2 pct fall in passenger vehicles and a 2.6 pct drop in sports utility vehicles. These areas would typically be impacted by consumers and might indicate consumer spending softened heading into the June quarter. “Other” vehicles which include vans, trucks and buses tend to be a barometer of activity among businesses. This category declined 4.8 pct April, while the annual pace of growth stepped down from 14.1 pct in March to 7.8 pct in April.

Weakness in the month prevailed across the States. Over the year to April, new motor vehicle sales were strongest in the ACT (10.1 pct), NSW (9.8 pct), followed by Victoria (0.8 pct). Sales in South Australia were up just 0.1 pct in the year. However, the Northern Territory (-7.4 pct), Queensland (-3.7 pct), Western Australia (-2.7 pct) and Tasmania (-1.4 pct) all saw sales decline in the year to April period.

"Measures in the Federal Budget to extend the instant write-off for assets under USD20,000 and a company tax cut to small businesses may also act to boost business spending. These factors should underpin support for sales and keep activity at an elevated level," St. George Bank said in their research note.