April auto sales are in and they show a modest 2.3% improvement over last year. The SAAR rate is down to about 14.2 million vs. a Q1 SAAR that was at 14.6 million. Overall sales came in at 1,183,072 units. This was slightly above the 1,157,000 reported for the same month last year.
The good news is that the number is well over 1 million and should supply enough satellite radio equipped cars for SiriusXM to demonstrate continued subscriber growth. The bad news is that at just a 2.3% gain, the sales this April were more modest than we would want to see.
In Q1 of this year Sirius benefited by being able to deliver a churn rate at 1.9% vs. 2.0% the year prior. Had the company announced churn at 2.0% the subscriber number would have declined from the year prior. Essentially the company is now more reliant on keeping churn at 1.9% than they ever have been. Last year Q2 churn was 1.9% and the company delivered 452,000 subscribers. While they may be able to match that churn rate, delivering 452,000 subscribers could be a challenge unless the company is able to boost the gross additions number well above the 2,179,000 reported in Q2 last year. This could be a challenge in that Q2 auto sales should come in behind Q1, which helped produce 2,161,000, less than what was added in Q2 of last year.
Essentially the sales mix will play a major role in the current quarter. More detail will be available in a Seeking Alpha article scheduled to publish later today.
Sales breakdown below: