Americans bought fewer cars in April than during any other month in the last decade. Sales figures adjusted for season and the two extra selling days of April show that low consumer confidence and high gas prices combined to make April a worse month for auto sales than most experts had predicted after dismal results in March. Many media sources this morning are reporting an industry-wide sales drop of more than 14 percent compared to April of last year, with only a handful of automakers showing any gain at all.
Reuters explains, "General Motors Corp, Ford Motor Co and Chrysler LLC posted deeper sales declines than expected, led by a sharp drop in trucks and SUVs. GM sales fell 23 percent, Ford 19 percent, and Chrysler nearly 30 percent, the automakers said on Thursday." Even Toyota, which had soared to become the industry volume leader on the strength of strong car sales and consumer interest in hybrids, posted a five percent decline in sales last month. Industry analysis firm Autodata said the sales figures made April "on an annualized and seasonally adjusted basis…the worst result for the industry since August 1998."
The figures continue a trend we've seen all year: those that are shopping are looking for smaller, more fuel-efficient rides. CNNMoney analyzes GM's numbers: "Sales of light trucks, which include SUVs and pickup trucks, dropped 27% while car sales dropped only 0.2%. The company saw sales increases of its mid-sized sedans such as the Chevrolet Malibu, and its crossover SUVs, which are more fuel efficient than their full-size cousins." Other automakers saw the same trend. Ford saw a 44% jump in sales of its small Focus, but that wasn't enough to prevent a 12% overall drop in sales. Sales of all Ford SUVs dropped by 36%, trucks by 18%.
The few automakers that saw a sales jump were those that don't rely on trucks or SUVs much, if at all. Autoblog reports that Mini, for instance, saw its sales jump 28% compared to April, 2007 figures.
The trend in consumers shifting to smaller cars has led to other industry problems as well, including a glut of SUVs sitting unsold on used car lots, with their prices declining but no one showing up to buy them.
Rebecca Lindland, auto analyst at Global Insight, told AFP that she "expects several more months of weak sales before a modest pickup later this year." Though the news is bleak for the auto industry, there may be good news for consumers buried in the numbers: automakers often respond to weak sales figures with incentives meant to lure buyers back into showrooms. Lindland said, "With consumer sentiment so low, incentives don't help that much because consumers don't feel good. It doesn't matter how sexy the incentives are, people are still not going out and shopping." If you are interested in a new car, however, early May might be a good time to look at the market.
Check back with us. We'll bring you updates on any new incentives the automakers offer over the next several days.