March 29, 2024

Demand for Small Cars Pushed April Sales Up 18%

General Motors led the Detroit automakers last month with a 27 percent gain in American sales, led by strong demand for its Chevrolet Cruze compact sedan and smaller, more fuel-efficient sport utility vehicles.

The auto companies attributed the surge in small-car sales to gas prices, which are approaching $4 a gallon. “Rising fuel prices have led many to rethink their vehicle of choice,” said Don Johnson, G.M.’s vice president for United States sales.

The higher demand for small cars has caused shortages of some models, particularly at Toyota, which is struggling to maintain an adequate supply because of production disruptions from the earthquake in Japan.

But over all, the demand for compact and subcompact cars is keeping the industry on track for a slow but steady recovery from recession-era sales levels.

The auto companies said sales for the year were running at an annual rate above 13 million vehicles for the third consecutive month.

The results are more impressive considering that incentive spending has dropped an average of $500 a vehicle from the period a year ago.

“Pent-up demand has been building in the industry for the last few years,” Mr. Johnson said. “The average age of vehicles is now above 10 years, the highest level ever.”

One of the hottest car companies during April was Hyundai, a Korean company, which rode the success of its new Elantra sedan to a 40 percent overall improvement in sales. Hyundai sold more than 22,000 Elantras in the month — up from 9,600 a year ago.

All three Japanese automakers lagged the market, especially Toyota, where sales increased about 1 percent. A Toyota executive said that the company was running low on inventories of two of its most fuel-efficient cars, the Prius hybrid and Corolla subcompact, because of factory shutdowns after the earthquake and tsunami in northern Japan.

“We’re feeling it in some models already,” said Bob Carter, head of Toyota’s sales operations in the United States. “There was an interruption in the flow of Corolla and Prius inventory from Japan.”

Toyota has less than a 10-day supply of Priuses, and about a 40-day supply of Corollas, he said. Other hybrid models, like the Lexus RX crossover, have been affected by major parts shortages as well.

Mr. Carter said that Toyota’s North American assembly plants were running at about 30 percent capacity. Japanese factories are closed for holidays, but are expected to reopen next week at half-speed.

“We will be ramping up this summer and be reaching normal production levels before the end of the year,” he said.

Honda’s sales increased 10 percent in April, and Nissan reported a 12 percent increase.

Nissan said it sold 573 Leafs in April, the best month so far for the all-electric sedan, which has been available in limited numbers. By comparison, G.M. sold 493 Volts, its plug-in hybrid.

The performance by General Motors was built on a substantial increase in passenger-car sales, which were up 50 percent in April from a year earlier. Sales of its full-size pickups increased only 2 percent in the month.

Ford reported a 16 percent jump in sales, with high demand for its new Fiesta and Focus small cars and its new and lighter version of the Explorer S.U.V.

A Ford executive said that the company was hard pressed to keep up with orders for the new Focus.

“Dealers were telling us they were selling them right off of the convoy truck,” said Ken Czubay, Ford’s head of United States sales and marketing.

The smallest of Detroit’s Big Three, Chrysler, appears to finally be seeing the benefits of an overhaul of its product lineup after emerging from bankruptcy two years ago.

Chrysler said its sales increased 23 percent for the month, and its car sales rose 41 percent from a year ago. The company also sold 882 Fiat 500 micro-cars, the first models it has introduced in the United States from its Italian partner.

The overall increase in sales came as incentive levels continued to fall.

Automakers spent an average of $2,100 on incentives during the month, compared to $2,600 in April of last year.

The largest rebates — about $3,200 a vehicle — were found on large trucks, according to the auto research Web site Edmunds.com.

“Demand has shifted toward smaller cars just as car companies are experiencing inventory shortages of those very vehicles,” said Jeremy Anwyl, chief executive of Edmunds.

“They are focusing their dollars where there are gaps between demand and supply, such as in the pickup-truck segment,” he said.

Article source: http://feeds.nytimes.com/click.phdo?i=9fde99a5453ec2bd3d5bcf04eb1b834a