U.S. light vehicle sales fell 6.9% to about 1.25 million sales in April from a year ago, hitting Detroit’s automakers hard, as the pinch of $3.60-a-gallon gas combined with a struggling U.S. economy to drive a strong consumer shift to more fuel-efficient cars and crossovers from large trucks.
The shift led to sales and market-share declines at General Motors Corp., Ford Motor Co. and Chrysler LLC, which have historically relied on truck sales. GM and Ford, however, noted jumps in car and crossover sales for the month, compared with a year ago.
Toyota Motor Corp., Honda Motor Co. and Nissan Motor Co. also felt the impact of fewer consumers choosing pickups and SUVs, but they overcame that squeeze with increased sales of cars.
“The reason for the take down is because of rising oil prices,” said Mark LaNeve, GM North America vice president of sales, service and marketing. “What we did not count on is oil hitting as high as almost $120 a barrel. What that’s doing is causing a sharp shift to cars and crossovers from large trucks.”
The highlights:
*GM reported sales of 257,638 vehicles in April, down 16.2% from the same month last year.
*Ford sales fell 12.1% to 200,007 in year-over-year comparisons.
*Chrysler reported April sales of 147,751, down 23.5% from the same month last year.
*Toyota reported a sales increase of 3.4% to 217,700 vehicles.
*Nissan posted a 6.7% overall sales increase for the month to 75,855.
Honda suffered a technical problem Thursday that kept it from reporting April sales. But it estimated that U.S. economic trends would push it to an all-time record for April — 134,400, a 6.7% increase — because its U.S. lineup consists primarily of small cars and small SUVs.
GM said retail sales of cars and crossovers rose more than 9%, but did not make up for declining truck sales and a sharp decline in fleet deliveries that GM said were impacted by the strike at supplier American Axle & Manufacturing Inc., which has reduced or stopped production at 31 GM plants.
LaNeve blamed the American Axle strike for costing GM 15,000 units of fleet sales last month. He expects that GM will not lose those sales, but instead will record them once the Axle strike is over.
GM’s drop in total sales was swayed largely by the Chevrolet Silverado pickup — where sales fell 24.7% to 37,231 last month from 49,436 a year ago — and the GMC Sierra pickup, where sales fell 21.7% to 13,196 from 16,849.
While they trade in smaller volumes, GM’s cars showed widespread gains, with the Chevrolet Aveo, Cobalt and Malibu; the Cadillac CTS, the Pontiac Vibe and the Saturn Aura all up by double-digit percentages from a year ago. And GM executives said they are looking for ways to increase production of the hottest selling vehicles quickly, even as it announced shift reductions at four North American truck plants earlier this week.
“Consumer preference is shifting and we’re shifting with it,” LaNeve said. “Throughout the industry, truck sales have been soft. We’ve been able to match the current economic slowdown with historically low total inventories, as we look for ways to increase car and crossover production.”
The trend repeated at Ford, where retail sales of its cars and crossovers also grew, led by a 43.5% increase in sales of the Ford Focus to 23,850 from 16,626 a year earlier.
Ford’s crossovers, led by the midsized Edge and smaller Escape, continue to perform well in dealer showrooms, with an overall gain of 11%.
Like GM, however, the gains in car and crossover sales weren’t enough to overcome losses on the truck side.
The F-Series pickups, Ford’s best-selling vehicle line and a major contributor to companywide profits, posted a decline of 21% to 44,813 for the month from 56,692. For the year, F-Series sales are now down 15.5%.
“We continue to see movement toward small and midsize cars as well as car-based crossovers,” Ford sales analyst George Pipas said. “I think it’s fair to say the trend is accelerating in 2008. I think we can tie the acceleration to gas prices.”
Chrysler Executive Vice President of North American sales Steve Landry said gas is certainly a factor in the declines in sales of larger vehicles, but general uneasiness about the U.S. economy has also played a role.
“We’re seeing higher monthly payments coming in and trading in for lower monthly payments,” Landry said.
Jessica Caldwell, an analyst at Edmunds.com said there are a lot of factors causing the shift.
“I think part of it is gas prices, but it’s also the economy in general,” Caldwell said. “When people had more equity in their houses, they felt good, they felt secure. Maybe they got a bigger car and didn’t worry about gas prices. But when you lose equity, and now with the gas prices as high as $4 a gallon, people start to downsize.”
And, Caldwell said, there’s no sign that the trend will end soon, so the domestic automakers are scrambling to let consumers know what they’ve got and meet the demand.
“I think we’re going to continue to see this trend toward small cars and crossovers,” she said. “Right now, a lot of people think of the imports when they think of smaller vehicles. I think the manufacturers are going to begin marketing those cars better than they have. And I think we’ll see these manufacturers look into their global portfolios to see what they can bring to the United States right now.”