April Sales Portend Recovering Market

April's automotive sales numbers suggest the market is recovering, although some analysts question the strength of the rebound.

Most of the major players posted positive numbers and some had a record sales month. Gainers included Ford, with 25% higher sales than the month last year; Nissan's were up 35.1%; Chrysler saw sales up 25%, and General Motors posted a combined 20% improvement in sales among Chevy, GMC, Buick and Cadillac.

Toyota's sales improved 24%; Subaru sales were up a whopping 48%; Honda and Acura were up 12% and both Audi and Hyundai set April sales records. The former saw sales increase 30%, and Audi had its second-best monthly performance ever with a 33% increase in year-over-year sales.

Despite that big silver lining, analysts are taking those numbers with a few grains of salt. After all, last April the market was scraping the bottom. "When the SAAR is 10.4 million and we used to be at 16 million units," says Jim Hossack of AutoPacific, referring to how far yearly auto sales dropped last year, April gains represent "a small increase."



The Tustin, Calif.-based automotive-market consultancy suggests in its just-released Fuel Price Impact Survey that the recession is lingering because even though sales volumes improved a lot in April, versus the dreadful April last year, consumer intent to purchase a new car or truck in the next two years has actually declined somewhat in the January to March period.

The firm, which polled 1,000 consumers in March, found that demand just isn't building. It says that in the September 2009 survey, 23% of respondents said they were "definitely or probably likely" to acquire a new vehicle in the next 24 months. In the latest March 2010 wave, only 20% indicated they will likely purchase in the next 24 months.

The study also found that even though the median fuel price paid in March, 2010 -- $2.82 per gallon -- was up about 13 cents from January 2010 and up 86 cents per gallon from March 2009, interest in small cars and hybrids is actually down.

While in March last year 22% of respondents said they would buy a small car, by January this year only 12% said they would, as did respondents in March this year. The firm says hybrid intention was down from 22% in March 2009 to 11% in January 2010 and down to 9% in March 2010.

Meanwhile, people seem to be bullish again on crossovers and SUVs, with intention up from 16% a year ago, to 27% in March 2010. Pickup-truck consideration was 12% in the year-ago study, and 14% this March, a 17% increase.

Hossack says the stronger SUV and crossover sales are signs of a healthier market, as people are willing to get bigger vehicles even though gasoline prices are actually higher than they were a few months back. "I do consider it positive," he says. "People are not just looking at small cars."

Chrysler, meanwhile, has launched another round of incentives, offering 0% on most 2010 vehicles for up to 60 months, or 1.9% for 72 months. The company will also offer cash rebates up to $4,000 for certain Jeeps.

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