Auto sales roundup: Detroit overshadows modest results

GMs primary pickup truck, the Silverado, had an GMs primary pickup truck, the Silverado, had an April sales rise of 28 percent. (March 29, 2013) Photo Credit: Nancy Borowick

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U.S. automakers gained share in a slowing U.S. auto market in April as improvements in the housing sector played in to Detroits traditional strengths: pickup trucks and sport-utility vehicles.

The overall pace of U.S. auto sales last month was the slowest since October, due in part to lower fleet sales and worse-than-expected sales from foreign automakers, such as Toyota Motor Corp.

The seasonally adjusted annual rate (SAAR) of new vehiclesales is expected to fall short of the average analyst estimatecalculated by Thomson Reuters of 15.25 million. General MotorsCo said the sales rate would be around 15 millionvehicles, while Morgan Stanley predicted 15.1 million.

"This is slightly lower than the pace the industry has beenrunning since last October, but it still marks the sixthconsecutive month of at least 15 million units," said KurtMcNeil, GMs head of U.S. sales operations.

"Heres whats important: Nearly every economic pillar oflight vehicle sales is strong enough to keep the SAAR in the 15million to 15.5 million unit range for the entire year," McNeiladded during a conference with analysts and reporters.

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Overall, industry new car sales for April are expected torise 10.4 percent from a year ago, according to Edmunds.com.

Such a rise would indicate a continuation of the moderaterecovery for the industry since its plunge in 2009 to the lowestsales since World War Two, adjusted for population.

Monthly auto sales are an early sign of consumer spending.For all of 2012, U.S. auto sales rose 13 percent to 14.5 millionlight vehicles. That was still below the 16.7 million vehiclesthe U.S. auto industry sold on average in the 10 years ending in2007.

GM said lower sales by some of its rivals to rental caragencies, governments and companies, or "fleet" business,accounted for some of the shortfall in the sales rate in April.

But analysts noted there was higher demand from customers inApril compared with the same period last year, indicating thatthe sales gains were more profitable.

Morgan Stanley analyst Adam Jonas said the "retail" annualsales rate was around 12.5 million vehicles, well above theroughly 11.5 million rate from last year.

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"I dont think we need to ring any alarm bells," saidTrueCar.com analyst Jesse Toprak. "Its still a very healthymarketplace that is recovering on merit, meaning that consumerdemand is propelling the market."

GM shares were down 1 percent at $30.53 and Ford Motor Coshares were down 0.4 percent at $13.56 on Wednesdayafternoon on the New York Stock Exchange.

TRUCKS, CROSSOVERS SHINE

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Fords April sales rose 18 percent, while GM and Chryslerposted gains of 11 percent.

Pickup trucks and SUVs are traditionally the strongestaspects of the domestic automakers lineups, even as all threehave diversified to include more smaller cars since record-highgasoline prices in 2008 and the industry downturn in 2009.

GM, Ford and Chrysler Group LLC postedbetter-than-expected sales for the month. Executives said theboom in pickup trucks is under way as housing construction andhome prices march higher. Sales of pickup trucks, which are muchfavored by contractors and tradesmen, have historically beentied to the housing construction market.

"The full-size pickup truck segment continues to show signsof strength, supported by replacement demand and the recovery in
housing," said Erich Merkle, Ford U.S. sales analyst.

Truck sales have grown at three times the rate of the U.S.auto industry this year, Merkle said. Ford said the smallutility segment, which includes the Ford Escape crossover,accounted for 15 percent of the industry last month, 1percentage point higher than a year ago.

Toyota, the third-largest automaker in the U.S. market,showed a drop of 1.1 percent in April sales, missing analystsexpectations. Honda Motor Co Ltd, the No. 5 automakerby sales in the U.S. market, showed a gain of 7 percent, in linewith estimates.

First-quarter U.S. housing starts rose 36 percent, whilehome prices rose 9.3 percent in February, said Jenny Lin, Fordeconomist. Pickup truck sales are strongest when theconstruction industry is on the rise.

GMs primary pickup truck, the Silverado, had an April salesrise of 28 percent. Chryslers Ram pickups rose 49 percent.Fords F-Series pickup trucks, the best-selling models in theU.S. market for 36 years, showed a 24 percent increase.

Automakers that are more reliant on passenger cars saw aless robust performance during the month. Volkswagen AGreported a sales decline of 10 percent.Nissan Motor Cos April sales rose 23 percent butslightly missed analysts expectations. Nissan announced it iscutting prices on seven models that represent 65 percent of itsU.S. offerings.

Jonathan Browning, president and chief executive ofVolkswagen Group of America, said industrywide sales of midsizesedans rose only 2.7 percent in the first quarter. Ford saidindustry sales of full-size pickup trucks were up 20 percent.

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