Gaining momentum, the new Chevrolet Sonic.
It was the sort of month when even the “losers” could see the bright side. Despite a modest decline in its own April sales, General Motors significantly increased its full-year forecast for an industry that continues to gain sales momentum despite near-record fuel prices and a variety of uncertain economic indicators.
If anything, the U.S. market showed strength in virtually all categories, and though more motorists clearly were looking for high-mileage small cars, demand surged for even some of the industry’s biggest products – sales of work trucks like the Ford F-150 and Nissan Titan suggesting to some observers that construction-related jobs are again on the rise.
A variety of makers turned in strong numbers, Volkswagen reporting a 40-year sales high, Audi and Hyundai both achieving records for the month.
While Honda didn’t quite reach that level, the maker did gain 9.2%, year-over-year, while Japanese rival reported April sales were up 11.6%. That’s good news for manufacturers that suffered the better part of a year of significant declines in the wake of the March 2011 Japanese earthquake and tsunami.
“April was an exceptional month for Toyota and a good month for the industry,” said Toyota Motor Sales vice president Bob Carter, who estimated the seasonally adjusted annual sales rate topped 14.2 million units last month.
Toyota seemed intent on building momentum whatever the cost. It ramped up incentives 4.4% compared to March – to $1,823 a vehicle, according to TrueCar.com – boosted advertising and shifted a sizable number of its vehicles into fleet markets with a clear intent of recapturing some of the market share it has lost over the past year.
But Toyota –like Honda and other Japanese makers, has gotten help from pent-up demand, many buyers putting off purchases rather than switching brands while dealers were in short supply.
Of the major Japanese brand the only one to deliver any surprises was Nissan which, along with its Infiniti luxury brand, was down a modest 0.3% for the month. But the luxury marque itself gained 5.4% for the month, buoyed by the new 3-row JX crossosver.
And the Nissan Rogue and Versa models set new April records, driven by demand for more fuel efficient cars and crossovers in the face of near-record U.S. gas prices. Perhaps counter-intuitively, Nissan also reported strong sales of big truck models like the full-size Titan pickup and Quest minivan.
In fact, demand for large trucks was up at many makers, including Chrysler. “A lot of old trucks have just been wearing out,” suggested analyst Joe Phillippi, of AutoTrends Consulting, and owners may be more optimistic about the need for new ones as they get back to work, he added.
Demand for the Ram Truck brand’s products was matched by sales by Chrysler Group’s other brands, including Jeep, Dodge, Chrysler and even Fiat, which had suffered a slow start after its return to the U.S. market last year. Chrysler’s group sales soared 20% for April – Fiat up a surprising 366% as it expanded the range of models under the 500 nameplate.
It was Chrysler’s 25th consecutive month of sales increases during April and the 14th-consecutive month that it beat the industry average increase.
“This business is all about product and the quality and fuel efficiency of our current vehicle line-up has never been better which is evident in our results,” said Reid Bigland, President and CEO – Dodge Brand and Head of U.S. Sales.
Across town, however, both General Motors and Ford Motor Co. wound up posting small declines for the month, primarily reflecting their shift away from a heavy, long-standing dependence on low-profit fleet sales.
In fact, GM raised its its full-year light vehicle sales forecast to 14.0 – 14.5 million units from earlier estimates of 13.5 million to 14 million units.
“We expect gradual improvement in the economy going forward,” said Don Johnson, vice president, U.S. Sales Operations. “Over time, strength in the manufacturing sector and strong retail sales will lead to more job creation. That will help more consumers put the recession behind them, gain even more confidence and drive vehicle sales higher for both the industry and GM.”
That position was echoed by Toyota’s Carter, who said while the economy is sending mixed signal at times, it continues to gain strength.Overall, Toyota enjoyed its best month since December 2010, said Carter, noting that the Camry remained the country’s best-selling vehicle and Prius deliveries again set record during April.
Meanwhile, Volkswagen of America, Inc. enjoyed its best April in more than 40 years.
“The demand and enthusiasm for our products continues at a strong pace and we are beginning to see the fruits of our investments pay off, marking the best April in over forty years,” said Jonathan Browning, President and CEO, Volkswagen Group of America, Inc. “As our sales continue to outpace the industry, we are investing in our infrastructure to ensure sustained growth.”
While light truck sales have failed to dry up – as some analysts had anticipated – there was still more movement into the most fuel-efficient passenger car segments. Along with strong demand for Nissan’s Rogue and Versa, GM’s two newest vehicles, the subcompact Chevrolet Sonic and the Buick Verano models, continued to perform well. Chevrolet Sonic sales were 38% higher than the vehicle it replaced. Buick Verano sales reached 2,989 units and have increased each month since it went on sale in late November 2011.
In addition, Chevrolet Volt sales of 1,462 units were strong nationally despite limited availability in California, where GM is launching a model that qualifies for high-occupancy vehicle lane – or commuter lane — access.
With industry planners forecasting continued growth in the market manufacturers are ramping up production plans. Hyundai, which announced an all-time record for April, is now planning to hire nearly 900 new workers as it adds a third shift at its Alabama assembly plant.
Kia and Hyundai, which announced plans to add a third shift at its assembly plant in Alabama, contiune to post double digit sales increase as did Mazda.
Paul A. Eisenstein contributed to this report.