Auto sales plunge to near 30-year lows

By Ben Klayman

CHICAGO (Reuters) - U.S. auto sales fell 34.4 percent in April as the industry held near the lowest levels in nearly 30 years and closed out the month with Chrysler LLC filing for bankruptcy protection.

The talk of bankruptcy surrounding Chrysler and General Motors Corp, which faces similar pressures, only spooked consumers last month and led to weaker-than-expected industry results, executives and analysts said.

"Clearly, the uncertainty, the bankruptcy talk, has really affected the entire industry," GM chief sales analyst Mike DiGiovanni said on a conference call, adding retail sales had hit a wall in the last week of April.

U.S. auto sales came in at a 9.32 million seasonally adjusted annual rate in April, according to Autodata Corp, below the 9.8 million rate that analysts had expected. The annualized rate of U.S. auto sales is a closely watched indicator of economic activity.

That marked the 18th consecutive month of year-over-year declining sales and a drop from 9.86 million in March.

However, executives at several automakers also pointed to signs of stability in the market.

"While April sales weren't much to call home about, there are signs that the sales contraction is nearing its end," said Bob Carter, general manager of Toyota Motor Corp's flagship brand in the United States.

Others called talk of a recovery wishful thinking.

"I don't think it's anything that can be characterized as a recovery until a bit down the road," Frost & Sullivan auto analyst Stephen Spivey said. "The people I've talked to really aren't looking for a rebound until next year."

WEAK SALES

Chrysler, which shut down production on Friday as it began the first day of bankruptcy hearings, posted a 48 percent drop in sales, the largest among the major automakers in the U.S. market, followed by Toyota and Nissan Motor Co Ltd with declines of 42 and 38 percent, respectively.

Sales at U.S. automaker Ford Motor Co slid almost 32 percent last month, while sales at GM, which like Chrysler has been operating under federal supervision, fell 34 percent.

Honda Motor Co Ltd's sales were off 25 percent.

"Wow, what a month in the last couple of days in the automobile business," Ken Czubay, Ford vice president of sales and marketing, said on a conference call. "Clearly, we continue to operate in a very challenging economic environment."

Ford officials said the U.S. economy appears to be reaching a bottom, citing rising consumer confidence [ID:nN01402214]. They expect a recovery in the second half of the year.