Truck sales, housing recovery boost Detroit carmakers in April

Detroit’s automakers were the big winners in April sales as a recovering housing market and easy credit sparked a surge in demand for new pickups and allowed all three domestic manufacturers to gain share.

Their success in April makes the first four months of 2013 the best year-opener since the start of the sport utility vehicle craze two decades ago. Year-to-date, Detroit’s automakers have sold 10.5 percent more cars and trucks than they had by the end of April last year, and their combined share of the market has increased from 44.7 percent to 46.2 percent.

Overall industry sales were up 8.5 percent as automakers sold 1,285,338 cars and trucks, up from 1,184,509 last April. But full-size pickup sales were up a whopping 27 percent on volume of 153,356 vehicles.

“The housing sector recovery is in full swing,” said Jenny Lin, Ford Motor Co.’s senior U.S. economist, in a conference call Wednesday. “We’re seeing continued strength of full-size pickup sales, particularly supported by the housing recovery and also the boom in the energy sector.”

Ford’s F-Series remains the best-selling vehicle in the United States, with sales up 24.4 percent. That helped the Dearborn automaker post the biggest gain among the domestic manufacturers. Ford’s sales were up 18 percent on volume of 211,984 vehicles. Ford’s share of the U.S. market grew to 16.5 percent from 15.2 percent in April 2012.

And Ford sales analyst Erich Merkle said much of that overall gain came in highly competitive parts of the country, such as California and Florida.

“The growth came predominately from the West and the Southeast,” he said. “The Western market was up 35 percent, and the Southeast was up about 28 percent.”

General Motors Co.’s sales increased 11.4 percent in April as the automaker sold 237,646 cars and trucks. GM’s market share increased to 18.5 percent from 18 percent a year ago.

“When credit is available and favorable, the job market is stable, incomes and household wealth are increasing, good things happen in the auto sector,” said Kurt McNeil, vice president of U.S. sales operations, in a call with analysts and reporters.

GM’s trucks did well in April, as did new vehicles such as the Cadillac ATS and XTS sedans.

Led by surging demand for its Ram pickups, Chrysler Group LLC reported its 37th consecutive month of year-over-year sales gains, selling 156,698 vehicles — 11 percent more than in April 2012. Chrysler’s share of the market increased to 12.2 percent from 11.9 percent.

“Chrysler Group’s best April sales in six years helped to maintain our sales momentum,” said Chrysler’s head of U.S. sales, Reid Bigland. “Our sales last month were solid across the board with seven Chrysler Group vehicles recording their best April sales ever.”

They included the Jeep Wrangler and Compass, the Dodge Challenger and Journey, the Ram Cargo Van and Fiat 500. The Dodge Dart, which launched last June, had its best month yet.

The situation was less rosy for foreign automakers. Toyota Motor Corp. saw its sales slip 1.1 percent in April to 176,160 vehicles, while its market share slid to 13.7 percent from 15 percent a year ago.

The company said the decline was due to a conscious decision by Toyota to cut back on less desirable fleet sales.

“Retail sales continue to grow,” said Bill Fay, head of the Toyota division in the United States, during a conference call. “Toyota division was the No. 1 retail brand in April and remains the No. 1 retail brand year-to-date.”

Honda Motor Co.’s sales were up, but not as much as the market as a whole. Though Honda sold 7.4 percent more cars and trucks last month than it did a year ago, its share of the market dropped from 10.3 percent to 10.2 percent.

Nissan Motor Co. bucked the trend in a big way. Its sales were up 23.2 percent last month, and its share of the market grew from 6 percent to 6.8 percent.

Analysts cautioned against counting the Japanese out.

“The weakening yen is giving the Japanese a lot of room to boost incentives, cut prices, pack vehicles with more content at lower prices, and increase marketing,” said analyst Michelle Krebs in a report released Wednesday.

“This will challenge Korean automakers the most, since it cuts into the Korean strategy to provide value with lower prices and higher content. It will affect the Detroit Three as well — but at least they have some profit buffer to respond, and they have the advantage of dominating a truck market that’s flourishing more and more every month this year.”

In fact, Nissan announced that it is cutting pricing on most of its models.

“Nissan’s incentive spend has historically run far higher than Toyota’s and Honda’s,” noted Citigroup analyst Itay Michaeli in a report Wednesday.

“This may have created a situation where Nissan’s vehicles were disadvantaged on Internet searches due to higher MSRPs … Reports do suggest that Nissan plans on reducing rebates to offset some of these announced price cuts, so this move may not necessarily amount to a price-war deceleration but rather an adjustment to the go-to market strategy.”

By Bryce G. Hoffman, Melissa Burden and Karl Henkel The Detroit News

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