Just as we predicted, it seems - despite the "everything is awesome" jobs data - that auto sales exuberance has hit the wall of credit saturation. Despite a surge in incentives in Q1, GM US auto sales rose just 0.6% (drastically lower than 6.0% rise expectations) and Ford rose 7.8% (missing expectations of a 9.4% surge). As J.D.Power notes "there are worrisome trends below the surface" of auto sales and with inventories at levels only seen once in the last 24 years (and tumbling used car prices), the automakers have a major problem if this is anything but 'transitory'.

It wasn't just GM and Ford though:

*FIAT CHRYSLER MARCH U.S. AUTO SALES RISE 8.1%, EST. UP 14%

*FIAT CHRYSLER HALTED IN MILAN, LIMIT DOWN AFTER FALLING 4.9%

*HONDA MARCH U.S. AUTO SALES UP 9.4%, EST. UP 16%

*VOLKSWAGEN OF AMERICA MARCH AUTO SALES DOWN 10.4%

*TOYOTA MARCH U.S. AUTO SALES DOWN 2.7%, EST. UP 5.6%

U.S. light-vehicle deliveries, aided by low gasoline prices, rising discounts and favorable financing terms, have climbed 3.4 percent this year through February after rising 5.7 percent to a record 17.47 million in 2015. But on a selling-day-adjusted basis, new-vehicle retail sales in March are expected to fall 2 percent from a year ago , according to a joint sales forecast by J.D. Power and LMC Automotive. It would be the first time there has been a year-over-year decline in sales on an adjusted basis since August 2010 , Power and LMC say.

What is most troubling however is, as JD Power notes, the worrisome trends below the surface...

Following an exceptional performance in 2015 with strong sales and record average price per vehicle sold, the U.S. automobile market must adopt a more disciplined approach to maintain long term health for the industry, according to a briefing given by J.D. Power here today at the 2016 J.D. Power Automotive Summit. J.D. Power warns that incentive spending on new vehicles has risen rapidly in the past year and is trending toward recession-era levels for the industry as a whole and has already exceeded recession-era levels on cars. The analysis, presented as part of the J.D. Power Automotive Summit, which kicks off the National Automobile Dealers Association Convention & Expo, finds that while overall industry retail sales are expected to grow by 300,000 to 14.5 million units in 2016, the growth is being delivered through actions that pose meaningful risks to the long-term health of the industry. Those actions include elevated incentive spending, increased use of extended loan terms, rising loan-to-value ratios and record levels of leasing. "Overall, auto sales figures continue to post strong results, but when you peel back just one layer beneath the surface, some worrisome trends are taking hold," said Thomas King, vice president of Power Information Network at J.D. Power. "Chief among the trends is the fact that first quarter sales incentives averaged 9.6% of MSRP, a 70 basis-point increase from last year and are trending toward levels observed at the height of the recession. "The increased spending, which is due primarily to manufacturers trying to offset a shift in demand from cars to trucks and SUVs, has the potential to reduce future resale value. Significant declines in the value of used cars would disrupt consumers' ability to buy new vehicles (due to lower trade-in values), while vehicle manufacturers and lenders would have to deal with exposure on their lease portfolios (if off-lease vehicles fail to achieve their expected resale value)."

And this sales weakness is occurring amid a mal-investment-driven excess inventory-to-sales at levels only seen once before in 24 years...

And worse still, used car prices starting to fade rapidly (biggest Feb drop since 2008)...

Falling used car prices means pressure on new car prices as well, which would be a shock to America's booming auto market.