July 30, 2021

Gp Delivers1

The excellent automotive artisans1

With a SAAR this hot, who needs big incentives?

Toyota, American Honda, Hyundai, Subaru, Kia, Volvo and Mazda more than doubled their sales totals from the previous April, with Volvo, Mazda and Toyota posting gains in excess of 180 percent. Ford had the lowest year-over-year jump among automakers that reported April sales, at 65 percent. Meanwhile, analysts said overall industry sales more than doubled — rising 110 percent — in April.

Just how widespread was April’s sales boom? Even minivans — which, as a segment, have been on a 15-year sales decline — experienced an almost fourfold sales increase for the month, according to J.D. Power.

“It’s kind of that point where there are no dogs … on dealer lots right now. Everything’s a good option,” said Jominy.

While it might be easy to dismiss the comparisons with 2020, last month looked pretty great compared with April 2019 as well, with a 23 percent rise in the retail daily selling rate.

“Nobody had any complaints about 2019,” Jominy said, adding that per-vehicle incentives were down almost $500 last month compared with those in April 2019.

On might expect auto sales to slow when inventory is lacking and incentives are falling. But none of those traditional impediments may matter when the broader economy is rebounding as fast as it is.

The U.S. Bureau of Economic Analysis estimated at the end of April that the nation’s gross domestic product had grown at an annualized rate of 6.4 percent in the first quarter. Meanwhile, the Conference Board’s monthly Consumer Confidence Index rose to its highest level since February 2020 — before the start of the pandemic in the U.S.

Also juicing sales are used-vehicle prices, which have risen to historic levels and enticed many otherwise passive consumers to jump into the new-vehicle market before inventory shrinks further.

“I think there’s a growing fear of missing out right now, especially if perhaps you thought you were going to need to buy a new vehicle over the summer months,” Jominy explained.

“Dealers have done an excellent job communicating with their customers … and that’s bringing people in to shop.”