GM sales jump 26% on small car sales gains
MICHIGAN, United States — General Motors’ US car and truck sales jumped 26 per cent in April as the economy continued to improve and higher gasone prices pushed buyers into more fuel-efficient vehicles.
The largest US car company sold 232,538 vehicles last month, led by a shift to small cars and crossover vehicles.
“Recently, rising fuel prices have led many to re-think their vehicle choice,” said Don Johnson, GM’s vice president of US sales.
GM, the first major automaker to report sales yesterday, is much better prepared for higher gas prices than in the past. It offers a wider selection of smaller vehicles. GM used to rely more on sales of pickup trucks and large SUV for profits. But sales of those vehicles would fall when pump prices spiked because they used more gasoline.
The company sold more than 25,000 Chevrolet Cruze compact cars in April, the best month for the car since its introduction in October.
Johnson said the Chevrolet Equinox and GMC Terrain crossovers also posted big sales increases in April as the shift toward smaller and more efficient vehicles accelerated from March. Crossovers look like sport utility vehicles, but are more fuel efficient because they are built on car platforms.
Compact cars made up nearly 15 per cent of US sales a year ago, but that rose to about 17 per cent in April, Johnson said.
He said GM hasn’t seen its sales rise because of model shortages at Japan-based automakers. The company will increase production if needed.
Nissan Motor Co, Toyota Motor Corp and Honda Motor Co have been forced to cut production. That’s because they are running low on parts made by factories disrupted by the earthquake and tsunami in Japan.
Some auto dealers reported better sales in April because customers are expecting model shortages. Those car shoppers want to buy while the selection is good.
GM said the US consumers spent more in April and feel better about the economy. The company thinks the auto industry recovery will continue.
GM’s April gains came despite lower incentives such as rebates and cheaper financing. GM incentives fell US$243 from March to April according to the automotive website Edmunds.com.
Total US incentive spending by automakers fell US$250 from the prior month.
“This is the clearest indication yet that automakers are gearing up for inventory shortages,” Jessica Caldwell, director of industry analysis for Edmunds, said in a statement.
She said demand for new cars is growing as the economy recovers. However, buyers may decide to wait for deals to return, and that may not be until fall.
In April of last year, buyers eased up on purchases after Toyota dropped the record-high incentives it had offered the previous month.
Sales of GM’s top-selling vehicle, the Chevrolet Silverado pickup truck, fell 4.6 per cent in April.
Johnson said commercial truck purchases continued to increase. But sales of trucks for personal use dropped as people shifted to smaller vehicles due to higher gas prices.
Shares of GM rose 87 cents, or 2.7 per cent, to US$33.05 after it released sales figures yesterday. It was the first time the price rose above the initial public offering price of US$33 since April 6, when it hit US$33.28.
Analysts expect overall industry sales in the US to increase 19 per cent from April of last year.