<!--:es-->April auto sales hurt by higher gas prices!<!--:-->

April auto sales hurt by higher gas prices!

DETROIT – U.S. auto sales fell in April as high gas prices hurt sales of most sport utility vehicles and trucks, leading to a further erosion of market share for U.S. automakers against their Asian rivals.

The slower sales for the traditional Big Three immediately sparked a fresh round of consumer incentives including interest-free loans on Tuesday.

Toyota Motor Corp. (7203.T) posted an almost 9 percent gain and Honda Motor Co. (7267.T) notched a 6.5 percent rise in stronger-than-expected sales, while General Motors (NYSE:GM – news) saw sales drop 7 percent and Ford (NYSE:F – news) lost 3 percent.

General Motors Corp. cut back on low-margin sales to fleet operators and saw its new fuel-efficient line of SUVs buck a downtrend that hit competing models in that profitable segment.

DaimlerChrysler AG’s (DCXGn.DE) Chrysler Group saw sales fall by an adjusted 4 percent in April. Slower truck sales weighed on both Chrysler and Ford and both announced new consumer incentives intended to regain momentum in the run-up to the summer selling season.

Chrysler, which has been more aggressive than the others in offering sales incentives this year, announced a zero-percent financing offer for a range of models, including its aging Dodge Ram truck line.

For its part, Ford said it would step up its spending on marketing for the remainder of 2006 and next year behind a new slogan: “Bold Moves.”

Ford is also offering interest-free loans for a period of five years on some of its SUVs, including the Explorer and Mountaineer, and cars.

Both Ford and GM have been struggling to cut costs in the face of market share losses to Toyota, Honda and Korea’s Hyundai Motor Co. Ltd. (005380.KS), which have been gaining traction in an almost-flat U.S. market.

Toyota posted a record sales tally for April led by demand for its redesigned Camry sedan and a strong showing by its Yaris subcompact.

“The market for lower-priced, higher-mileage vehicles are showing strength, as are hybrids,” Toyota Motor Sales President Jim Press said in a statement. “Record oil prices have a way of reminding us of how close to the cliff we’re living.”

Honda also saw strong sales of its new Fit compact hatchback and its Ridgeline pickup truck, pushing overall sales up 6.5 percent in the month.

“I think the moral of the month was that the more gas-efficient models did well,” Edmunds.com sales analyst Jesse Toprak said after a month that saw gas prices topped $3 per gallon in most U.S. cities.


One standout for GM was the relative success of its new line of full-size SUVs, which are being marketed in part on their improved fuel economy.

GM left its overall production forecast unchanged at 1.2 million units for the second quarter. “We do need to see sales — and we expect to see sales strengthen as we get into May and June,” GM sales analyst Paul Ballew said.

The Chevrolet Tahoe, GMC Yukon and Cadillac Escalade — GM’s new line of SUVs — combined for a 15-percent sales gain. That momentum is critical for GM because the new SUVs are selling for $40,000 on average for the Tahoe and the Yukon and $62,000 for the Escalade, far more than the typical passenger car.

“I think the question is — Are they going to be able to maintain that momentum into the fall?” said Toprak, who added that new vehicle launches can face a tougher test after a few months once pent-up demand from established buyers wanes.


Ford’s sales loss was near the weak end of the range of analysts’ expectations and was accompanied by a nearly 10 percent drop in sales of the company’s best-selling F-Series pickup trucks.

Ford sales analyst George Pipas said the rise in gas prices may have caused potential truck buyers to defer purchases.

But he also said that the market for large SUVs, once a highly profitable segment for Ford, appeared to be shrinking more rapidly than the company had anticipated and was on track for a double-digit percentage decline in 2006. “It is pretty eye-popping,” he said.

Ford’s overall retail sales, excluding less-profitable shipments to commercial fleets and car rental agencies, were down 10 percent in April, the company said.

One positive development for Ford was strong demand for its new cars — Fusion, Milan and Zephyr. The three Mexican-built mid-size sedans, launched last fall, drove an 8 percent gain in Ford’s total car sales.

Chrysler, which is banking on the success of upcoming models to allow it to scale back discounts, cited the sales record of its recently introduced Dodge Caliber compact as a win for the month. The company sold over 11,000 Calibers as inventory of the new model ran down to just 12 days of sales.