DETROIT – General Motors Corp. (GM) and Ford Motor Co. (F) on Tuesday reported lower April U.S. vehicle sales as high gasoline prices, and ebbing demand for their once profitable SUVs, caused them to lose traction again to foreign competitors.
The decline spelled more trouble for Detroit. The two largest U.S. automakers face mounting financial hardships as they lose more U.S. market share — their industrial lifeblood — to fast-growing Asian rivals.
By contrast, Toyota Motor Corp. (search), the richest automaker on the planet, said its April U.S. sales rose 21 percent from last year for its best month ever. And Nissan Motor Co. Ltd. (search) said its sales jumped 27 percent.
Korea's Hyundai Motor Co. Ltd. (search), a relatively new threat to Detroit, also reported double-digit sales gains.
GM (search), which last month reported its biggest quarterly loss since it narrowly skirted bankruptcy 13 years ago, saw its April sales fall nearly 8 percent. Ford (search), the second-largest U.S. automaker, said its sales fell 5 percent, meanwhile. All sales figures are adjusted for an extra selling day in April this year and exclude the automakers' foreign brands.
Sales of large sport utility vehicles fell sharply again at both companies, as record U.S. gasoline prices continued to take a toll on their most fuel-thirsty models.
"Certainly fuel economy matters, and gas prices on the margin will affect some categories of the business," Paul Ballew, GM head of industry analysis and sales, told Reuters in an interview on Friday.
He said the SUV sales slump had as much to do with GM's aging vehicle lineup as it did with higher prices at the gasoline pump, however. "We're in the latter stages of a life cycle," Ballew said. Cheap loan offers and big rebates have done little to help.
Despite disappointing results at GM and Ford, Ballew said vehicle sales across the industry were expected to strengthen to a seasonally adjusted annual rate of about 17.2 million units, up from a rate of 16.6 million in April last year.
Recent surveys show that U.S. consumers have turned a bit more glum about the future as they struggled with high gasoline prices and sluggish wage growth. But spending on cars and trucks, which account for about one-fifth of U.S. retail sales, has rebounded from a soft patch at the start of the year.
The Chrysler (search) side of DaimlerChrysler (DCX), which has played down the impact of higher fuel prices, said its April sales rose 5 percent. It was the 13th straight month of year-over-year sales gains for Chrysler.
Nissan's North America sales chief Jed Connelly told Reuters its strong performance was driven in part by record sales of its Altima mid-sized sedan. At Toyota, sales of the all-new Avalon full-size sedan were up 166 percent over last year and the gas-electric Prius (search) hybrid saw sales gain 196 percent.
The gains came as sales of some of Toyota's older, truck-based SUVs also suffered steep declines.
"Consumer appetite for hybrid and fuel efficient vehicles continues unabated," Jim Press, executive vice president and chief operating officer of Toyota's North American sales operation, said in a statement.
Underscoring the importance of Japanese automakers and their growing presence in the U.S. manufacturing sector, President Bush was due to visit a sprawling vehicle assembly plant Nissan operates in Canton, Miss., on Tuesday afternoon.
The visit comes as Bush is pushing his plan to shore up Social Security by reducing promised benefits for all but low-income retirees.