Ford Analyst: High Gas Prices May Help April Car Sales

by Jeff Gilbert
WWJ AutoBeat Reporter

DEARBORN (WWJ) Car and truck sales are expected to remain strong in April, not necessarily in spite of high gasoline prices, but possibly because of them.

"Higher gas prices are a call to action," says Ford Sales Analysis Manager George Pipas. "If you were thinking about trading, higher gas prices introduces an imperative into the consumer psychology."

Gasoline prices rose 25 cents a gallon in April. Pipas says the improving economy is giving car buyers the confidence they need to buy a more fuel efficient vehicle.

"The economy's recovering. There are more people at work today than there were three months ago."

Auto companies release their April sales numbers on Tuesday.

Pipas expects the March sales rate to remain close to the rate we saw in April…a seasonally adjusted annual sales rate above 13 million units. Many other analysts agree.

"As April's sales pace confirms, increasing gas prices and shortages in vehicle inventory have yet to trump the overall recovery that has been progressing since the fall of 2010," said Jeff Schuster, executive director of global forecasting at J.D. Power and Associates, in a statement. "However, looking at the remainder of the year, growing uncertainty in these two variables is increasing the risk that that the industry may not reach the expected 13 million-unit level for total light-vehicle sales."

The concern among many analyst is that sales could drop in May and June because of shortages of Japanese made products. Some analysts expect sales to bounce back later in the year. Other's aren't so sure.

"While the top-line numbers of April car sales look healthy, a deeper look shows that the industry is already experiencing a downward slide.April sales usually start slow and then jump after April 15, perhaps having something to do tax-filing day. This year, we have seen the opposite pattern," says a statement from Edmunds.com CEO Jeremy Anwyl.

Analsyts at IHS Automotive recently downgraded their forecast for the entire year, but Ford is sticking with a prediction of an industry that well sell above 13 million units.

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