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GM improves, Toyota slips as industry sales decline eases

Fri, 01 May 2009

Ford, Honda and General Motors posted their smallest sales declines of the year in April, while Nissan and Toyota had their largest, as the industry improved from depressed levels of February and March.

Drops of 33 percent at Ford Motor Co. and GM were in line with analysts' forecasts, as was American Honda's 25.3 percent slide. Nissan North America's 37.8 percent fall and Toyota Motor Sales U.S.A.'s 41.9 percent tumble were steeper than forecasts.

For the second straight month, no automaker posted a sales increase. The April total slipped to 819,817 U.S. light vehicles, a 34.3 percent decline from a year earlier and the smallest drop since October. Autos sold at a seasonally adjusted annual sales rate of 9.5 million units, below analysts' projections but another increase from February's 9.1 million rate, which was a 27-year low.

"Reports that the light-vehicle sales rate could reach 10 million units turned out to be somewhat exaggerated," Ford sales analyst George Pipas said today during a conference call.

Daimler AG's sales fell 30.7 percent, including a 49.9 percent plunge for Smart minicars. That marked the first decline this year for the Smart brand, introduced in January 2008. Subaru, one of the few automakers to post a sales increase through March, fell 6.7 percent in April for its sharpest decline this year.

Ford outsells Toyota

Ford's sales had dropped more than 40 percent in each of the first three months of the year. Its April decline included a 36.9 percent slide at Volvo. Sales of its traditional Ford, Lincoln and Mercury models fell 31.3 percent. Ford outsold Toyota for the first time since March 2008.

Ford executives said the sales pace degraded in the final week of the month. Pipas attributed the slowdown in part to the "CNN effect." He said uncertain customers stayed away from showrooms in the wake of reports about turmoil at Chrysler and at General Motors.

Chrysler posted a 48.1 percent decline for April, a day after filing for bankruptcy. General Motors is at risk of filing within a month.

The month's results "fell a little short of our expectations, and we believe it was because of more turbulence in the minds of the consumer as to what was going on," said Ken Czubay, Ford vice president of U.S. sales and marketing.

April marked the 18th straight year-over-year sales drop. Analysts predict a sales recovery in the second half of the year, as the United States struggles to climb out of a recession that's also in its 18th month--the longest since the Great Depression.

Sales to individual customers "continued at about the same selling rate as February and March," said Mark LaNeve, GM's North American sales chief, in a statement. GM's better results were "largely driven by a return to more normal volumes of fleet sales," the company said in a statement.

At Chrysler, co-President Jim Press said a 66 percent decline in fleet sales was the biggest drag on April numbers. Retail sales fell 39 percent, he said.

Consumers poised?

Sales that have hovered between a 9 million- and 10 million-unit rate this year are signs of stability, said GM sales analyst Mike DiGiovanni.

"Consumers could be poised to start spending some money," he said. "They're taking a wait-and-see attitude."

Earlier this week, the Conference Board, a market information group, reported that its consumer confidence index had increased to 39.2 in April from 26.9 in March. That's still down from 62.8 in April 2008. As a reference, the board says the level of consumer confidence in 1985 was 100.

Six analysts surveyed by Automotive News and three dozen economists in a Reuters poll had predicted an average April sales rate of 9.8 million units.

The rate rose in April despite incentives declining about 4 percent from March levels to $3,031 per vehicle, according to data. That's still up almost 30 percent from April 2008. Of the biggest automakers, Chrysler spent the most on incentives: $4,288 per sale.

Among GM's eight brands, the smallest declines came from the four it said this week it would keep: Buick, Cadillac, Chevrolet and GMC. Chevrolet declined the least: 26.7 percent.

Richard Truett, Jamie LaReau and Amy Wilson contributed to this report.

By Chrissie Thompson- Automotive News