GM Beats Estimates as Auto Sales Rise to 13.2 Million Pace
General Motors Co. (GM)’s U.S. deliveries rose more than analysts’ estimated as increasing demand for fuel-efficient models pushed the industry’s annual sales rate above 13 million for the third straight month.
GM’s U.S. sales climbed 26 percent to 232,538 vehicles from 183,997 a year earlier, the Detroit-based automaker said today in a statement. The gain topped the 14 percent increase estimated on average by seven analysts surveyed by Bloomberg. Ford Motor Co. said its sales rose 13 percent to 189,778, and Toyota Motor Corp. (7203) deliveries increased 1.3 percent to 159,540.
The U.S. auto sales rate in April was 13.2 million on a seasonally adjusted annualized basis, topping the 13 million pace that was the average estimate of 12 analysts surveyed by Bloomberg. GM’s Chevrolet Cruze compact car set a record for sales since its introduction last year, and Dearborn, Michigan-based Ford’s Fiesta subcompact exceeded 9,000 deliveries for a second consecutive month.
“Gas prices are the story,” Michelle Krebs, an analyst for Santa Monica, California-based Edmunds.com, said in a telephone interview. “It looks like $4 a gallon is the magic number to shift consumer behavior.”
Confidence among U.S. consumers rose more than forecast in April, signaling that six straight months of job growth are helping Americans endure the highest fuel prices in almost three years. The average U.S. price of regular unleaded gasoline rose 37 percent in the past year to $3.97 a gallon yesterday, according to AAA. The price peaked at $4.11 in July 2008.
‘Vote of Confidence’
“This is a sort of vote of confidence for the recovery,” said John Canally, an economist and investment strategist at Boston-based LPL Financial Corp., which oversees $330.1 billion in assets. “You have a better backdrop today than you had in 2008, when energy prices rose the way they are now. The economy is early in the recovery rather than late and you have some pent-up demand for autos.”
Ford’s 13 percent gain trailed the average estimate of seven analysts surveyed by Bloomberg for a 14 percent increase. Sales of the Focus compact car rose 22 percent to 17,265. F-Series pickup sales rose 11 percent.
Nissan, Honda Sales
Nissan Motor Co.’s (7201) 12 percent sales gain trailed the 33 percent increase estimated on average by four analysts. The Tokyo-based automaker today won a contract to supply New York’s fleet of yellow taxi cabs. U.S. sales gained 9.8 percent at Honda Motor Co. (7267), less than the 14 percent average estimate of four analysts surveyed by Bloomberg.
The increase in deliveries at Toyota, whose position as the world’s largest automaker is under challenge by GM, trailed the 1.4 percent average estimate of four analysts.
Toyota’s Lexus, the top-selling luxury brand in the U.S. for the last 11 years, trails Bayerische Motoren Werke AG’s namesake brand and Daimler AG’s Mercedes-Benz by more than 6,000 vehicles through four months this year.
Mark Templin, head of U.S. Lexus sales, last month said the brand doesn’t expect to retain its volume lead in the U.S. this year because of supply disruptions following the March 11 earthquake. All but one Lexus model is made only in Japan.
“We haven’t felt the biggest brunt yet of not having enough cars in inventory due to Japan’s problems,” said Jesse Toprak, vice president of industry trends at TrueCar.com in Santa Monica, California. “In May, we’re going to start seeing this become more of an issue, and in June it’s going to become a severe handicap for the industry.”
Less than two years after declaring bankruptcy, GM is poised to reclaim the global auto sales lead from Toyota as the March 11 earthquake in Japan disrupts supply, and reviews by industry researchers such as Consumer Reports show the automaker’s quality has slipped.
The Japan earthquake may result in “constraints” to industry supply that will affect the industry selling rate in the second and third quarters, Don Johnson, GM’s vice president of U.S. sales, said today on a conference call. The automaker still predicts total sales for the year will be 13 million to 13.5 million, including medium- and heavy-duty trucks, as inventory and sales may recover in the fourth quarter, he said.
GM lowered incentive spending by more than 10 percent, or about $400 per vehicle in April from a month earlier, Johnson told reporters yesterday in a conference call. Ford said its discounts fell by more than double the industry average of $300, George Pipas, Ford’s sales analyst, said today on a conference call.
Hyundai Motor Co. (005380), South Korea’s largest automaker, said sales in April rose 40 percent from a year ago to 61,754 vehicles. Kia Motors Corp., Hyundai’s affiliate, reported a 57 percent U.S. sales increase. Combined, the Seoul-based corporate partners sold a record 108,828 cars and light trucks last month.
Chrysler Group LLC, based in Auburn Hills, Michigan, said sales rose 22 percent to 117,225 vehicles. The results topped the 18 percent average of five analysts’ estimates, as deliveries of the Grand Cherokee sport-utility vehicle more than doubled.
U.S. light-vehicle sales climbed to 11.6 million in 2010 from a 27-year low in 2009. Deliveries still were 31 percent fewer than the 16.8 million annual average from 2000 to 2007, according to Autodata. A 13 million light-vehicle sales rate this month would be a 16 percent increase from the 11.2 million pace in April 2010.
To contact the editor responsible for this story: Jamie Butters at firstname.lastname@example.org.