Auto Industry on Road to Recovery But Pace Slows

DETROIT – The U.S. auto industry stayed on the road to recovery in April, but it eased up on the gas pedal a bit.

Ford Motor Co. saw last month’s sales rise 25 percent from a year earlier, while General Motors Co. climbed 6.4 percent. Sales for Toyota Motor Corp., which has grappled with a string of safety recalls, rose 24 percent.

Even Chrysler, which has struggled much of the year, reported a 25 percent sales increase, while Nissan, Honda, Hyundai, Subaru and others also continued to see gains.

But the industry overall likely won’t be able to maintain the pace seen in March, when big sales promotions led by Toyota fueled higher sales. The Japanese automaker needed to lure buyers after suffering a series of safety recalls beginning last fall.

As buyers’ expectations for even better deals grew, demand last month slipped from March and some automakers eased up on promotions.

Auto research website says incentives fell an average of 5 percent in April as the luster wore off some of the deals and automakers tried to pull back on spending. But there were still were good bargains. Honda Motor Co. spent a record $1,787 per vehicle, while Toyota spent $2,498, down $245 from record-high levels in March. GM spent $3,273 per vehicle, although that was skewed by high incentives on the brands it is discontinuing.

GM said it spent $100 less per vehicle in April than in March.

“We’ll be judicious with our incentives,” said Steve Carlisle, GM’s new vice president of sales. “We’ll be competitive but not foolish.”

Toyota used incentives to continue to spur demand as it distanced itself from safety recalls involving unintended acceleration. But sales slowed 16 percent compared with a strong March.

The Japanese automaker said its April sales were propelled by some of the vehicles involved in previous recalls like the Corolla compact, Prius hybrid and RAV4 small crossover.

Honda’s sales, including the Honda and Acura brands, rose 12.5 percent over April of last year.

Nissan Motor Co.’s April sales rose 34 percent, led by higher demand for the Rogue crossover, the Altima sedan and the newly released Cube hatchback. Crossovers are SUVs built on sedan bodies and combine elements of both vehicles.

Chrysler reported its first double-digit sales gain in nearly five years, led by a minivan promotion that drove sales up 68 percent. It saw sales surge for its Chrysler Sebring and Dodge Avenger midsize sedans.

But its Ram pickup truck sales dropped a troubling 20 percent, even as main competitors GM and Ford reported rising pickup sales.

Chrysler’s sales bucked industry trends and rose 3 percent over a March.

GM, after taking out brands that GM is phasing out or selling, GM sales rose 20 percent from April of last year. GM’s four remaining brands are Chevrolet, Buick, GMC and Cadillac.

The Detroit-based automaker saw strong sales of several new products, including the Chevrolet Camaro, Chevrolet Equinox, Buick LaCrosse and GMC Terrain. Full-size pickup truck sales rose 8.4 percent, an indicator that the construction business is in recovery.

The Dearborn, Mich.-based automaker’s pickup sales were particularly strong. Ford said F-Series sales jumped 42 percent thanks to the new Super Duty truck. SUV sales rose 33 percent, led by the Escape and Explorer. Car sales rose 10 percent.

Korean automaker Kia Motors Corp.’s April U.S. sales rose 17 percent on strong demand for its newly released Sorento crossover and Forte sedan. Hyundai’s sales increased 30 percent on rising demand for the new Sonata midsize sedan.

Subaru’s U.S. sales soared 48 percent the back of its Outback small wagon, which doubled its sales from April of last year.

GM’s Carlisle said his company’s performance is consistent with a slow and steady economic recovery. The automaker stuck with its forecast of total U.S. light vehicle sales of 11.2 million to 11.7 million for the year.

That’s better than last year’s 10.4 million, but far below the peak of more than 17 million in 2000. Consumer spending rose 0.6 percent in March, the largest amount in five months. Yet the increase was financed out of savings. Incomes rose only slightly. Factory activity in April grew at the fastest pace in nearly six years.