Automakers’ sales jump almost 20% in April from a year earlier
Auto sales surged in April from depressed levels of a year earlier, but the selling pace slumped from March, when several manufacturers launched major marketing campaigns and began offering big incentives to buyers.
Automakers sold just under 1 million cars in April. Although that was up almost 20% from a year earlier, it translated into an annual sales rate of about 11.2 million vehicles, down from a rate of 11.8 million in March.
Despite the slowdown, most of the big manufacturers said Monday that the industry was still on track to recover from last year’s dismal economy, when automakers sold 10.4 million vehicles.
But some analysts said that consumers might not be as eager to purchase cars as the industry assumes and that the latest offers of low interest rates and discounts have masked that sentiment.
“People were waiting for that bargain message to purchase, and that’s what we saw in March. But in April we had a lot of the same deals — but not better deals — and consumers bought fewer cars,” said Jessica Caldwell, an analyst with auto information company Edmunds.com.
One reason for the decline was a pullback in deals. According to Edmunds.com, the average automotive manufacturer offered incentives of $2,654 per vehicle sold in April. That’s down $152 from March and $403 from April 2009.
Other research firms are finding that consumers may be becoming more cautious. In a March survey of 1,000 consumers, market research company AutoPacific found that 20% said they expected to buy or lease a new a vehicle sometime in the next two years. That’s down from 23% in September.
“The industry may not be out of the woods yet as demand does not appear to be strengthening,” said Jim Hossack, a consultant at AutoPacific. “I am not sure the slump is over yet. Consumers are still concerned.”
Moreover, there could be a mismatch developing between some of the new models planned by automakers, including small cars and hybrid vehicles, and what consumers are seeking, he said.
In March, just 12% of the shoppers surveyed by AutoPacific said they would purchase a small car. That’s down from 22% a year earlier. Hossack noted that even when the price of fuel increased by more than 40% during that time, consumers’ interest in small cars fell by a similar percentage.
“It would take a significant increase in gas prices to turn that consumer sentiment around,” Hossack said.
Nonetheless, the numbers posted by the automakers Monday looked good in comparison with a year earlier, when the industry was mired in one of its worst years in decades.
Ford Motor Co. sales rose 24.9% to 167,283 vehicles, according to Autodata Corp. Year to date, the automaker’s vehicle sales have grown by more than a third.
Caldwell said the automaker was poised to have a stronger year than 2009. It has several important new models coming out, starting with the Fiesta, a small compact that goes on sale at the end of May, and then the Focus, which arrives about year-end, Caldwell said.
“These are really strong products for Ford,” Caldwell said.
Though the April sales figured looked “good enough” for Ford to gain market share, “we think a slowdown from March’s 43% is something to watch,” said Efraim Levy, an analyst with Standard & Poor’s Equity Research.
General Motors Co. also reported a sales gain Monday. GM said sales rose 20% in April compared with a year earlier, after factoring out the Pontiac, Hummer, Saturn and Saab brands it closed or sold as part of its bankruptcy reorganization.
Total combined sales for GM’s remaining brands — Chevrolet, Buick, GMC and Cadillac — hit 182,895 for the month, according to Autodata Corp. Including the discontinued brands, sales rose 7.2% to 183,614, the auto information company said.
New models are helping GM to recover from its slump and a bankruptcy reorganization that left the U.S. government as its majority owner. Five new-generation models — Chevrolet’s Equinox and Camaro, the GMC Terrain, Buick Lacrosse and Cadillac SRX — sold in April at a combined rate nearly 300% over the vehicles they replaced. Those models accounted for more than 110,000 of the vehicles GM sold last month.
The automaker has a bevy of new-car introductions in the second half of the year, starting with the Buick Regal in early June and continuing with other new models or new-generation vehicles, including the Cadillac CTS coupe, the GMC Sierra and Chevy Silverado trucks, the Chevrolet compact Cruze and finally the electric Volt near the end of the year.
Toyota Motor Corp. saw sales jump 24.4% to 157,439 vehicles in April, bolstered by incentives designed to lure buyers into showrooms after a series of large recalls in recent months.
Toyota said it planned to continue offering the deals for another month, and noted that the special lease deals had pushed that method of financing to about 35% of its sales, up from about 24% a year earlier.
The automaker plans to eventually shift from pitching incentives to marketing the attributes of its vehicles. But “in the short term, though, we are going to do what it takes to keep ourselves competitive,” said Bob Carter, group vice president for Toyota Motor Sales USA Inc.
Among the other Japanese automakers, American Honda Motor Co. said its sales rose 12.3% to 113,697. Sales at Nissan North America rose 35.1% in to 63,769.
Chrysler Group, which is now managed by Italian automaker Fiat after the Auburn Hills, Mich., carmaker’s emergence from bankruptcy in June, had a U.S. sales increase of 24.8% to 95,703 vehicles, the best year-over-year percentage sales improvement since July 2005. Analysts said the automaker was helped by fleet sales to rental-car companies.
Still, for the first four months of this year, the automaker’s sales are up just 2% from last year. Chrysler has been hurt by a lack of new-model introductions that are driving sales gains at GM and Ford.
Meanwhile, Chrysler said Monday that the National Highway Traffic Safety Administration was investigating a potential problem with accelerator pedals in the 2007 model year Dodge Caliber.
Some customers have reported sticking accelerator pedals, the automaker said. There were no reports of accidents or injuries resulting from the problem, but Chrysler said it was cooperating with safety regulators and that owners of the vehicles could take them to a dealership for a free inspection. Chrysler said the problem appeared to be limited to a small group of vehicles built during a five-week window in March and April of 2006.
