* Slowest monthly growth pace for U.S. auto sales since
* Demand for pickup trucks, SUVs helps Detroit automakers
* Sales slightly below expectations but still strong
* GM, Chrysler's April U.S. sales rise by 11 pct
* Toyota sales slip 1.1 percent
By Bernie Woodall and Deepa Seetharaman
DETROIT, May 1 U.S. April auto sales slowed to
their lowest monthly pace since last autumn as foreign
automakers reported lackluster results, and sales to commercial
For the first time since last October, U.S. monthly auto
sales dipped below 15 million vehicles on a seasonally adjusted
annualized rate. Research firm Autodata Corp reported
industrywide U.S. sales came in at a rate of 14.92 million
vehicles in April.
"Sales are coming in a little bit below expectations, but
still quite strong," said Alec Gutierrez, analyst with Kelley
Blue Book. "As we've seen all year and the last couple of years,
it looks as though the auto industry remains one of the few
bright spots in the broader economy ... in addition to housing."
Fewer sales to commercial customers is not necessarily a bad
thing for the U.S. auto industry because there has been an
increase in sales to consumers, a segment that is more
profitable, several analysts said.
However, General Motors Co, tops in the U.S. market,
expressed concern that Japanese and South Korean automakers may
raise incentives spending in coming months, which could force
other manufacturers to do the same to compete.
"We have seen more aggressiveness certainly in the incentive
space, both from the Japanese as well as the Koreans," said Kurt
McNeil, GM's chief of U.S. sales. "In our case, we're trying to
just continue obviously to remain competitive and disciplined."
Since the downturn of the auto industry in 2008 and 2009
which included bankruptcies for GM and Chrysler, the three major
U.S. automakers have increased per-vehicle profit partly by
curbing spending on incentives. Incentives are given by the
automakers to dealers or directly to consumers in the form of
lower financing rates or cash rebates that cut the cost of
buying a new vehicle.
Japan's weaker yen provides flexibility to offer incentives
without hurting profit as much for Japanese automakers, but not
as much as a few years ago. Now, the majority of vehicles sold
in the United States by Toyota Motor Corp, Honda Motor
Co Ltd and Nissan Motor Co Ltd are made in
Still, some auto executives and industry analysts said they
feared that the weaker-than-expected performance of major
foreign-based automakers will cause a price war in the coming
months that could cut in to company profit.
Nissan announced late on Tuesday that it is cutting prices
on seven models that represent 65 percent of its U.S. offerings.
But Nissan also said it would lower its incentives on these
models to maintain the amount of money the company makes on
APRIL SALES RISE 8.5 PCT VS YEAR AGO
For April, U.S. auto sales rose 8.5 percent from a year
earlier, according to Autodata. Analysts polled by Thomson
Reuters had expected a rise of 11 percent.
"I don't think we need to ring any alarm bells," said
TrueCar.com analyst Jesse Toprak. "It's still a very healthy
marketplace that is recovering on merit, meaning that consumer
demand is propelling the market."
U.S. automakers gained share in a slowing U.S. auto market
in April as improvements in the housing sector played to
Detroit's traditional strengths: pickup trucks and sport-utility
Ford Motor Co's April sales rose 18 percent, while GM
and Chrysler Group LLC posted gains of 11 percent. Chrysler is
majority-owned by Italy's Fiat.
Toyota, the third-largest automaker in the U.S. market,
showed a drop of 1.1 percent in April sales, missing analysts'
expectations. Honda, the No. 5 automaker by sales in the U.S.
market, showed a gain of 7 percent, in line with estimates.
Monthly auto sales are an early sign of consumer spending.
For all of 2012, U.S. auto sales rose 13 percent to 14.5 million
light vehicles. That was still below the 16.7 million vehicles
the U.S. auto industry sold on average in the 10 years ending in
GM shares ended 2.1 percent lower at $30.18 on Wednesday and
Ford shares slipped 1.7 percent to $13.38 on the New York Stock
TRUCKS, CROSSOVERS SHINE
"It's all about pickup trucks," said Citi Research analyst
Itay Michaeli. "This is going to be the big story of 2013. Every
pent-up demand metric out there is more robust for pickup trucks
than it is for the overall sales."
Pickup trucks and SUVs are traditionally the strongest
aspects of the domestic automakers' lineups, even as all three
major U.S. automakers have diversified to include more small
cars since record-high gasoline prices in 2008 and the industry
downturn in 2009.
GM, Ford and Chrysler posted better-than-expected sales for
the month. Executives said the boom in pickup trucks is under
way as housing construction and home prices march higher. Sales
of pickup trucks, which are much favored by contractors and
tradesmen, have historically been tied to the housing
"The full-size pickup truck segment continues to show signs
of strength, supported by replacement demand and the recovery in
housing," said Erich Merkle, Ford U.S. sales analyst.
Truck sales have grown at three times the rate of the U.S.
auto industry this year, Merkle said. Ford said the small
utility segment, which includes the Ford Escape crossover,
accounted for 15 percent of the industry last month, 1
percentage point higher than a year ago.
First-quarter U.S. housing starts rose 36 percent, while
home prices rose 9.3 percent in February, said Jenny Lin, Ford
GM's primary pickup truck, the Silverado, had an April sales
rise of 28 percent. Chrysler's Ram pickups rose 49 percent.
Ford's F-Series pickup trucks, the best-selling models in the
U.S. market for 36 years, showed a 24 percent increase.
Automakers that are more reliant on passenger cars saw a
less robust performance during the month. Volkswagen AG
reported a sales decline of 10 percent.
Nissan's April sales rose 23 percent but slightly missed
Jonathan Browning, president and chief executive of
Volkswagen Group of America, said industrywide sales of midsize
sedans rose only 2.7 percent in the first quarter. Ford said
industry sales of full-size pickup trucks were up 20 percent.