DETROIT – U.S. auto sales tumbled in April as jitters over a weaker housing market and higher gas prices kept American consumers from showrooms, sales results from major automakers showed Tuesday.
Sales at General Motors Corp (GM) were down 2 percent, while Ford Motor Co. (F) saw sales fall 6 percent after executives at both automakers warned that industry-wide results had taken an unexpected turn for the worst in the month.
Sales at Chrysler Group, the Detroit-based automaker that faces a possible spin-off as a unit of Germany's DaimlerChrysler AG (DCX), were up a market-leading 10 percent, boosted by industry-leading sales incentives.
Asian automakers, which have been consistently taking market share from their U.S. rivals, also had mixed results.
Toyota Motor Co. (TM), which outpaced the rest of the industry with 11-percent growth in the first quarter, saw its sales growth slow to just under 4 percent.
Sales of Toyota's passenger cars, including its powerhouse Corolla sedan, were down in April in a striking reversal from recent months.
Honda Motor Co. sales were down 2 percent, and Nissan Motor Co , which some analysts had expected to buck the downtrend, reported an 11-percent sales drop.
Percentage sales changes were adjusted for two fewer selling days in April than the same month a year earlier.
"It appeared to us that consumers were just frozen," Nissan U.S. sales chief Brad Bradshaw told Reuters. "It just seemed to us that these housing issues...along with higher gas prices seem to have frozen everybody."
Sales analysts at other automakers were also cautious.
Ford and GM both said they were sticking with forecasts that see full-year, industry-wide sales down only slightly for 2007, although both noted the risks to that outlook.
"We're dealing with volatile gas prices and the correction (in) the housing market -- at least in some parts of the country -- and that's certainly not creating ideal conditions," GM sales analyst Paul Ballew said.
GM trimmed its second-quarter North American production forecast by 1.3 percent to 1.145 million units. Despite the drop in overall sales, the company said its higher-margin retail sales had gained almost 4 percent in April.
Ford's chief sales analyst George Pipas had warned last week that overall sales in April were shaping up as "terrible," citing deepening uncertainty from a weaker housing market.
Even so, Ford's own sales decline for April was more limited than some analysts expected. Ford's retail sales dropped 17 percent, Pipas said.
"Make no mistake about it: retail sales were down for the industry," Pipas said on a conference call to discuss the April results.
SALES INCENTIVES DOWN
Amid the weaker sales, overall incentives offered on new cars dropped by 5 percent to $2,342 in April, contributing to the weak showroom traffic, according to industry tracking service Edmunds.com.
"Consumers are conditioned to wait for good deals, and in the past, the wait typically pays off," Edmunds analyst Jesse Toprak said.
Automakers do not typically disclose how much they spend on sales incentives, which can include concessional financing, cash rebates or additional payments to dealers.
Edmunds estimated that Chrysler Group led the industry in incentive spending in April at a per-vehicle average of $3,994. Ford was No. 2 with an average incentive of $3,016, it said.
GM, which ran a month-end program offering lower-cost financing to less credit-worthy borrowers, was third at $2,768 per vehicle, the report said.
Jim Sourges, an auto analyst at consulting firm Capgemini, said automakers could be forced to discount more heavily if May and June results extend the weakness seen in April.
But Sourges noted some luxury auto brands, including Toyota's Lexus, which saw a 14-percent sales gain in April, appeared insulated from the economic uncertainty.
"There are still pockets of the market that are being steered to luxury and appear immune to what's happening in housing or incentives," Sourges said.