April car sales delivered a higher Seasonally Adjusted Annualized Rate (SAAR) than what we saw in March, which was already considered great. The SAAR for April approached 13.2 million, and is an indication that the recovery in the auto sector was strong enough to overcome the jilts associated with the disaster in Japan. It is now time to look at leading indicators for May to gauge where car sales will be this month.
One decent indicator is the incentives being offered by various manufactures. Auto companies offer incentives to spur sales. If inventory levels are high, they sometimes adjust those incentives to move metal. If sales are slow bigger incentives will be offered as well. When things are marching along okay, the incentives tend to remain about the same from month to month.
For May 2011, the key note is that in general the incentives remained about the same. The key incentive out there seems to be 0% deals. This month GM, Ford, Chrylser, Toyota, Mazda, and Nissan are all bringing 0% deals to the table. These manufacturers represent some of the biggest sales volume in any given month. Other manufacturers are also offering great deals. You can read about all of the May Auto deals on iKickTires, a site that tracks all things automotive.
For Sirius XM investors the 1.15 million cars sold in April was a great start to the second quarter. If May can deliver over 1 million units, the company should be on very solid footing to have some great metrics when they report the quarter.
Position - Long Sirius XM Radio