New-car sales drop 7% in California

New-vehicle sales fell by 7% in California during the first quarter as the state’s weakening housing market crimped consumer spending, the California Motor Car Dealers Assn. reported.

The fact that new-vehicle registrations in California suffered a much bigger drop than the national decline of 1.2% indicates how hard the state has been hit by the housing crunch, economists said. High gas prices and troubles in the sub-prime lending industry also are hurting sales.

Despite the drop in new-vehicle registrations, Toyota Motor Corp. increased its industry leading market share in California by two percentage points to 24%. Among vehicle segments, compact SUVs such as the Honda CRV and entry-level cars such as the Toyota Yaris showed the biggest gains. Full- and mid-sized SUVs recorded the biggest drops.