Auto Bloodbath: Every OEM Misses April Sales Estimates As Inventories Continue To Soar

Tyler Durden's picture

After an abysmal March print and growing speculation on wall street that auto sales are looking less like a "plateau" (Ford's label not ours) and more like a debt-fueled bubble on the verge of an epic collapse, auto investors were looking toward April auto sales for signs of hope.  Unfortunately, the "hope" trade failed to materialize as every single, major auto OEM missed their April sales estimates in fairly spectacular fashion. 

Here's a summary of the April carnage:

 

Or, in units if you prefer:

Autos

 

SAAR:

According to Ward's data, April SAAR came in at 16.8mm units, down 3.7% YoY, which was well below the JD Power estimate released last week of 17.3 mm.

Auto

 

Meanwhile, the YoY change in unit sales was the worst since 2011.

Auto

 

Inventory Days:

Meanwhile, inventory days are still trending higher as OEMs continue to push product on to dealer lots even though sale through to end customers has seemingly stalled. 

GM, one of the few OEMs to actually disclose dealer inventories in monthly sales releases, reported that April inventories increased to 100 days (935,758 vehicles) from 98 days at the end of March and just 71 days (681,402 vehicles) in April 2016.  But please don't worry because GM would like for you to know that their soaring inventories are normal and "reflect strong sales"...no really, here's the quote from their press release:

"As planned, GM’s inventories reflect strong sales, lower car production and strategic, launch-related growth in truck and crossover stocks."

 

Incentive Spending:

Meanwhile, GM's incentive spending also soared YoY to 11.7% of their average transaction price (ATP) versus 10.3% last year. And Ford also announced on their sales call that average incentive spending was up about $300 YoY.

And, as one industry observer notes, the combination of rising inventory levels, higher incentive spending and pending model changeovers in coming months could imply that the auto industry could unravel in fairly short order.

 

OEM Commentary:

Of course, despite the abysmal numbers, OEMS still tried to paint a rosy picture for their industry. 

  • GM: “When you look at the broader economy, including a strong job market, rising wages, low inflation and low interest rates, and couple them to low fuel prices and strong consumer confidence, you have everything you need for auto sales to weather headwinds and remain at or near historic highs."
  • Ford"We're maintaining our industry guidance for the year of 17.7 million vehicles. To put things into perspective, it's important to note that we've seen a plateauing industry, basically last year and this year, and when you have that kind of an industry, you're going to have variations, both up and down, month-to-month."

But while OEM mgmt teams remain optimistic, it seems that investors are getting slightly concerned as both the OEMs...

 

...and suppliers all tanked on today's sales figures.

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cheka's picture

wait until the credit blows up too....gonna be epic

cant count how many unemployed unemployables i see tooling around in new government motors products

BullyBearish's picture

may be a good time to "FALL" into a new or late model vehicle soon...

new game's picture

05 or 06 2500, cummins, long box soon under 10k, under 150k...

patience, then pounce.

13,900-18 right now...

nope-1004's picture

There are sales figures, and then there is the economics of the situation.

The problem here is that sticker prices for new vehicles will never be allowed to fall, because the auto makers are basically .gov entities now being subsidized by the taxpayer.  New vehicles that don't get force fed onto dealers are just crushed and destroyed - the right of the reserve currency issuer.  The auto sector will finally fail when .gov does, until then, this is just like housing:  Kept afloat to hide the stark reality.

 

Joe Davola's picture

So, does calling price cuts "incentive spending" change the economics of the profit on a sold automobile?  Or is it called that to hide it from shareholders?  Or is it done to leverage accounting schemes?  Minimize taxes?

JRobby's picture

Get your rain gear! The shit is going to start blowing sideways, gale force!

Charles Wilson's picture

Somebody lie to me and tell me this is different from a time years ago when N Vietnamese workers were taking apart old electric fans, rewiring the copper into "NEW!" old electric fans.

New Industrial Policy. Yeah...Right.

847328_3527's picture

A purple Escalade is an entitlement, yes?

Nobody For President's picture

Don't forget the spinner wheels....

de3de8's picture

Yep, the only question is the precise time to pull the trigger

peopledontwanttruth's picture

Right before your money is worthless

GUS100CORRINA's picture

Here it comes (again): "CASH FOR CLUNKERS"!!!!

WE HAVE GOT TO GET RID OF THE INVENTORY!!!!!

Need I say more???

BlindMonkey's picture

"05 or 06 2500, cummins,"

 

Perhaps not.  The pre-emmisions trucks will keep a premium over the >07 models for the rest of eternity.

Raffie's picture

%50 off sale

or

Buy 1 get 1 free

nuubee's picture

I can't wait for new trucks to become as cheap as economy cars are now. Then I'll upgrade.

Juggernaut x2's picture

Every soccer dad in my suburb has a new $70K GMC Sierra- of course they never actually haul anything in them.

JRobby's picture

"Soccer Dad" Nice touch!

"Nobody wants to employ white males anymore. They are racist haters!"

Nobody For President's picture

GMC Sierra's ?

Fuck. Real new age country green rush dudes buy Ford 350s quad cab OR Dodge Ram Diesels.

Their wives can't park 'em in the local grocery store parking lots worth a shit, but never mind. They do haul grocerys OK. (They also get keyed on busy days...)

Just real news from a country boy.

 

Oliver Klozoff's picture

According to Max Keiser, you really don't own the car you buy, the company still owns the software in it.

Juggernaut x2's picture

Ford is still a good short all the way to $7- other than pickups their product line sucks and is not selling.

new game's picture

fuk ford, gm and dodge, cept the cummins engine...

FreeShitter's picture

Love the edge sport and the truck lineup....prefer the older bodystyle fusions.

Consuelo's picture

 

 

The revised 2017 ecoboost 3.5 is one nice motor.   Beefed up turbo's, internals, etc.

 

 

Hitlery_4_Dictator's picture

My Wifes 2007 Fusion is solid, bought new in 2007.....120k miles and nothing has gone wrong. 2.3 liter gets 31 mpg on the highway....

vealparm's picture

My 2011 Caddy DTS Northstar V-8 gets 30 MPH on the hwy.

Abbie Normal's picture

Good luck getting any non-diesel turbo engine to last 100K miles.

Bad Whitey's picture

Indeed Abbie.  Naturally aspirated engines are the only way to go.  Turbos (the eco-boost models) blow out, it's just a matter of time.  When they do, you have an expensive repair bill to deal with.  Moreover, racing style engines were never meant to be put into trucks...  

 

 

Nobody For President's picture

Ah, Ford alumunim pickup beds suck - like the chevy ads (or maybe dodge) show. Throw something sharp in them and they dent or puncture.

I've got an '86 Toyota pickup that has hauled a LOT of stuff, and the bed is still good.

OK, it is bent a bit from a 360 degree mid-air roll over (long story), hit a tall stump, did a 360 and landed on it's wheels, in reverse - and I walked, but the bed got a little tweaked. But no dents in the bed. Tough. My saying is "I'm gonna keep the pickup until it's dirt or I am. - Bet on the pickup."

Bad Whitey's picture

Dude...  The bed in a pickup truck is meant to have a BEDLINER installed ($350-$500 expense) before your first haul.  Spray on or drop in (spray on is much better).  Thus, the "aluminum beds get dented" argument falls flat.  Ford makes the best all around trucks for your money now because of the light weight, aluminum body.  Way better on gas and the exterior will never rust.  

 

 

Arnold's picture

GM Lordstown to shut down for two weeks, in addition to the third shift elimination and two weeks they have already shut down.

http://wkbn.com/2017/05/01/general-motors-lordstown-plant-shutting-down-...

Falling Down's picture

II'm waiting for Fort Wayne assy to shut down for a while, as well as slowdowns at Honda and Toyota here in the Midwest.

 

kbohip's picture

I recently went to check out a used SUV from a private seller.  I'm just looking for something old and cheap I can use to tow with or hunt with as necessary.  The seller was located in a low income apartment complex.  She was all excited to get me to buy her SUV as she had just been approved for a loan at the local Chevy dealership on a new Equinox.  Upon hearing this news and seeing the horrible condition of the SUV she was attempting to sell me I almost felt pissed.  She had been given her current SUV by her father some years back and had then proceeded to destroy it, both inside and out.  I mean how do you break seatbacks!?  She even had stickers on the inside of the lifgate of people having sex.  Strange enough in itself but the fact that she had kids who were with her was just wrong.  Total trash woman who does not deserve the once nice SUV her father gave her much less a new one to destroy.  Screw GM for even enabling this crap!

Hitlery_4_Dictator's picture

Trash begets trash. The reason society is going down so fast is scum are rewarded by having scum kids. The smart educated whites are not having kids.

Cursive's picture

Oh, it's just a bump in the road, right?  Bwwwwaaaahhhh.

meditate_vigorously's picture

We are probably within 10 years of going through exactly what the Soviet Union experience. That would be a good thing for the country as a whole, and probably bad for most of us here on ZH.

Nobody For President's picture

10 years. Yeah - probably bad. I'll probably be dead.

But that's ok - I've had a good one.

ParkAveFlasher's picture

Almost time to buy me some Escalades!

Tennessee Patriot's picture

Flasher,

It's pronouned "Ex-ka-lade". 

Fixed it. 

roadhazard's picture

Who wants to buy a rig with no CD player.

11b40's picture

Anyone with a sattellite radio.  Love my SirriusXM

Abbie Normal's picture

Who pays to listen to radio?

11b40's picture

Millions of people.  I made enough off Sirrius stock to pay for generations of annual dues, and I drive 25-30,000 miles per year.