April Car Sales Numbers Show Recovery Still Rolling Along

by Jeff Gilbert
WWJ AutoBeat Reporter

DETROIT (WWJ) - High gas prices don't seem to be hurting sales for the major auto companies.. In fact, they could have been a help in April, boosting overall sales about 18 per cent over April 2010, and sending small car sales soaring.

"There's just so much demand right now for fuel efficient vehicles in every category," says Edmunds.com senior analyst Jessica Caldwell. "Obviously, the most being the subcompact and supcompact. We're obviously going to see that continue as gas prices don't look like they're going to come down any time soon."

The industry seeing a seasonally adjusted annual sales rate around 13.5 million units, similar to March's rate.

The trend toward smaller vehicles was obvious among most brands, as GM posted a 27 per cent sales increase, and Ford saw its sales up 16 per cent. Chrysler sales were up 22 per cent. The majority of the growth came in small cars and small crossovers.

"You know, there's this shift to smaller vehicles," says GM's Vice President of U.S. Sales Operations Don Johnson. "But in terms of the number of consumers who have determined that they need new transportation, we still see that continuing to be pretty strong, and continuing to strengthen throughout the year."

GM says it's car based products are up 50 per cent, small crossovers up 49 per cent. The Chevy Cruze compact was GM's best selling car.

"With gas prices approaching $4 a gallon and consumers being especially sensitive to the hit on their wallets, small cars like the Chevy Cruze look to be among the top sellers in April. Fuel-efficient cars stole the NY auto show last week, too, and this trend may stick as being green and frugal appeals to many consumers recovering from the recession and looking ahead to the future," said Edmunds.com Senior Analyst Michelle Krebs, in a statement.

Ford also seeing its strength in the small car category, with solid sales of the Fiesta and all new Focus.

"Our view is that the segment would have even been stronger if the inventory of these models, not only at Ford--but on an industry wide basis--had been larger," said Ford Sales Analysis Manager George Pipas.

Gas prices are also having an impact on pickup sales, which remain strong as the economy recovers. But, half of Ford's F-150 sales were with the new Ecoboost six cylinder engine.

"I have never seen a fifty per cent sales rate in a big pickup," says Pipas.

Volkswagen had its best sales month in eight years, posting a 23 per cent increase over last year. The company seeing strong sales of compact and mid size cars. That's a trend that the company's top U.S. executive, Jonathan Browning, believes will continue.

"Whilst you may see, as I say, a bit of an ebb and flow in the future, the underlying trend is toward the compact vehicles."

Kia had its best month ever, with sales up 42 per cent from 2010. Hyundai says it came close to hitting a new all-time sales record last month, but it was still the brand's best April ever. It's sales were up 40 per cent.

The earthquake in Japan causing problems for Toyota...with their sales up just over 1 per cent. Nissan was also impacted, but not as much.

When it comes to luxury sports cars, it's more about the overall economy than fuel economy. Porsche sales were up 80 per cent over last year. Jaguar sales are up 39 per cent. Land Rover sales are up 8 per cent.

The increased demand, and tighter supply, along with customers desire for more content, is also driving prices up. That's good news for car companies, but making it harder for customers to find a deal.

"Prices for these vehicles are definitely high," says Jessica Caldwell of Edmunds.com. "Incentives have definitely decreased."

The concern among many analysts 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. Others say it will be next year before all of the sales that could be lost over the summer will come back.

Ford's George Pipas says they are not backing off on their projections for the rest of the year.

"We still feel very comfortable with the full year forecast of 13 to 13 and a half million vehicles sold in the United States," he said. "That would be up from last year's 11.6."

Japanese automakers have been warning dealers that they could receive fewer vehicles over the summer, creating shortages of some smaller products. So far, all three domestic companies say they don't expect to see any vehicle shortages because of the earthquake in Japan.

"It's too early to call all clear, so to speak," says GM's Don Johnson. "But, we're monitoring it closely, and we don't see any material impact on our 2011 results."

Follow Jeff Gilbert on Twitter @jefferygilbert