DETROIT – U.S. vehicle sales turned out even worse than expected in April, muting optimism that the auto market is poised to rebound. Auto makers blamed the high-profile troubles at General Motors Corp. and Chrysler LLC for dragging down sales last month across the industry. Chrysler sought bankruptcy protection on Thursday.
“We’ve been fighting all these rumors left and right and it doesn’t help,” GM sales chief Mark LaNeve told The Wall Street Journal. “I thought we were going to close much better than we did.”
Shaky consumer confidence and high unemployment levels also offset benefits of increased credit availability, deep auto discounts and U.S. government backing of warranties on GM and Chrysler vehicles.
April sales totaled 819,540 cars and light trucks, a decline of 34 percent from a year earlier, according to market research firm Autodata Corp. The seasonally adjusted, annualized sales pace was 9.32 million vehicles, down from March’s 9.86 million rate.
“Industrywide, April felt more like a dust bowl than a spring garden for new car sales,” Jim O’Donnell, North American president for BMW AG, said in a prepared statement.
Every major auto maker reported dramatic declines from year-earlier levels. Toyota Motor Co., with a 42 percent slide, fell behind Ford Motor Co. in the monthly tally for the first time since early 2008, even as Ford’s sales fell 32 percent. GM sales dropped 33 percent and Chrysler registered a 48 percent decline. Honda Motor Co. saw its U.S. sales drop 25 percent and Nissan Motor Co. was off 38 percent.
Sales had gotten off to a solid start in April, but anxiety around a Chrysler bankruptcy filing grew relentlessly. GM’s plans to exact more painful cost cutting in its bid to survive also contributed to the unease among car buyers.
The Obama administration has given GM until June 1 to present a convincing restructuring plan or file for bankruptcy protection. Chrysler is working to emerge from Chapter 11 protection in no more than two months.
Chrysler plans to take out full-page newspaper ads next week to restore confidence among consumers, letting them know, “We’re still here,” Chrysler sales chief Steven Landry said.
Auto makers have heaped on incentives, which increased by 29 percent, or $680 per vehicle, last month compared with a year earlier, according to car-shopping site Edmunds.com.
But deals weren’t enough to help even healthier, foreign-based auto makers. Toyota sales are off 38 percent year-to-date. The company predicts 2009 auto sales will come in at around 10 million sales, which would mark a 24 percent decline from last year, when sales fell to a 15-year low.
Toyota said Friday it plans to increase production of select vehicles after inventory levels dropped to a point that dealers stepped up orders.
“Although our April sales weren’t much to call home about, there are signs that the industry sales contraction is nearing its end,” Toyota division executive Bob Carter said in a conference call. “We are also encouraged by several economic indicators that point toward a modest recovery.”
While companies said they see signs of an impending rebound, more turmoil lies ahead as GM and Chrysler race to remake themselves. The auto makers recently announced plans to idle most manufacturing for two months this summer in an effort to bring down inventories.
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