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‘Perfect Storm’ May Hit Car Sales And Production

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April auto sales for 2011 have increased over the same period in 2010.

April auto sales for 2011 have increased over the same period in 2010.

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  autos arrows plug v2 Perfect Storm May Hit Car Sales And Production

DETROIT (WWJ) – It appears that automakers were able to clear out their showrooms this month.  Edmonds.com is predicting that car sales will be up this April nearly 20% over last year.

But Senior Analyst Michelle Krebs says she doesn’t think the trend will last much longer, due to supply shortages brought on by the Japanese earthquake.

But she’s still concerned about the effect of the skyrocketing price of gas.

“What we are seeing is a convergence of a lot of factors; we are seeing the situation of Japan, with production down there causing some production interruptions here, and we don’t know the extent of that and I think that May will be a very telling month,” Krebs says.

So far, Krebs says, people are buying cars despite the cost of gas.

“…at the same time we are seeing higher gas prices, which means when that happens people flood to the show rooms to buy small fuel-efficient vehicles, and a lot of those are made in Japan, and then the ones that aren’t are like the Ford Fiesta, and they are not in big supply either,” says Krebs.

And Krebs says supply shortages brought on by the Japanese quake are expected to take a toll on car sales next month and beyond.

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