Car Sales On Track Despite Mixed April Report

DETROIT (WWJ) - Freshly stocked showrooms gave Toyota and Chrysler a boost in April, but Ford and General Motors weren't able to make-up for three fewer selling days than last year.

But, analysts don't believe a modest overall sales increase of 2-3 percent is enough to derail the auto industry recovery.

"It's clear to me that we're seeing a consistent trend of recovery, and pretty strong auto sales," said analyst Jeff Schuster with LMC Automotive.

INTERVIEW: Jeff Schuster of LMC Automotive

INTERVIEW: Jessica Caldwell of Edmunds.com

INTERVIEW: Jesse Toprak, Truecar.com

The seasonally adjusted selling rate for April is running in the 14.5 million unit range, making it the best April in four years.

"The consumer demand is healthy," said Jesse Toprak, director of market intelligence for TrueCar.com . "It's nowhere near where it should be in terms of the ideal levels. But, it's certainly recovering from the recession and the slow selling pace of the last several years."

Toprak said a five percent sales drop at Ford and an eight per cent decrease at GM were not any reason for alarm.

"What we're seeing right now is the Japanese automakers, particularly Toyota, coming back strong, probably stronger than we thought this year," he said. "In fact, Toyota has been able to recapture all of the market share from last year's production issues. They did this much faster than we thought."

Toyota sales were up 11.6 percent in April. That works out to 23 percent on a daily selling basis.

"I think it is fair to say that Toyota is in a stronger position now from an inventory standpoint," said LMC analyst Jeff Schuster. "It's going to be rebuilding the brand and getting buyers back in in the next several months."

Volkswagen posted a 31 percent sales increase, on the strength of new products. New products pushed Chrysler sales up 20 percent.

"April was another strong month for Chrysler as our sales increased 20 percent, we recorded our 25th-consecutive month of year-over-year sales growth and we reported our strongest quarterly profit in 13 years," said Reid Bigland, President and CEO – Dodge Brand and Head of U.S. Sales.

GM Sales Operations Manager Don Johnson on a daily selling basis, there sales are up 3 percent, retail sales up 12 percent.

"It's very consistent with what we saw in March."

Sales of the Chevy Volt extended range electric vehicle eased a bit in March. GM sold 1462 Volt's. Johnson said there was a problem with availability in California, which is the Volt's best sales market.

The strong start is prompting GM to revise its sales forecast for the full year.

"As we've looked back at the strength of the first quarter, we are re-adjusting our outlook for the full year," said Johnson. "We were at a 13.5 to 14 million range for light duty sales. We are now increasing that to a 14 million to 14.5 million range."

While Ford's sales also dropped, it was a good month for their most fuel efficient products. It was a rough month for the Fiesta subcompact, but the Edge and Fusion set records, and the redone Explorer gave that nameplate its best April in seven years

"Strong demand for fuel-efficient vehicles continues," said Ken Czubay, vice president, U.S. Marketing, Sales and Service. "J.D. Power research shows fuel economy is the top reason for purchasing new cars this year. Ford is seeing this firsthand with strong sales of our most fuel efficient vehicles, including a 77 percent increase in vehicles with EcoBoost engines in April."

There are some concerns that record low incentives may impacted sales. CNW market research says floor traffic softened during the middle of the month and predicted that could lead to increased incentives in the coming weeks.

Other analysts aren't so sure.

"If you have people coming back into the market, not a lot of competition from the used side, is there really a reason to increase incentives," said Jessica Caldwell of Edmunds.com.

Caldwell says the auto industry recovery remains on track.

"We're still seeing the whole pent up demand being realized in the marketplace," she said. "If you look at the average trade in age of a vehicle, it continues to be over six years, which is higher than what we've seen in the past."

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