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Declining Sales Of Trucks, SUVs Deflate Industry

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The Associated Press

Published: May 2, 2008

DETROIT - General Motors, Ford and Chrysler saw double-digit U.S. sales declines, but Toyota's sales edged up 3 percent in April, as high gas prices accelerated consumers' rush away from trucks and sport utility vehicles.

Weak sales were expected throughout the industry as gas prices rose to record highs. Automakers reported sales Thursday.

General Motors Corp. said its truck and SUV sales were down 27 percent, dragging down increases in car and crossover sales and GM's best-ever month for hybrids. GM's overall sales were down 16 percent for the month compared with last April.

"Consumer preference is shifting, and we're shifting with it," said Mark LaNeve, GM's vice president of North American sales. Sales of GM's midsize Chevrolet Malibu shot up 40 percent, but the long popular Chevrolet TrailBlazer SUV saw sales dip 73 percent.

GM said it produced 130,000 fewer vehicles in April because of an ongoing strike at supplier American Axle and Manufacturing Holdings Inc., which has affected 30 plants. LaNeve said the production cuts didn't affect sales to individual customers because of the company's large inventory of trucks and SUVs. But LaNeve said GM cut 15,000 sales to rental and commercial fleets in April because of the strike.
Shifting Focus
Ford Motor Co. said its SUV sales were down 36 percent in April compared with the same month last year, and its overall sales were down 12 percent. Car sales were down only 1 percent, buoyed by sales of the Ford Focus small car, which saw a 44 percent jump in sales. The Focus gets 24 miles per gallon in the city and 33 on the highway. By comparison, Ford's largest SUV, the Expedition, gets 12 mpg in the city and 18 on the highway.

George Pipas, Ford's top sales analyst, said retail - or non-fleet - sales of passenger cars exceeded trucks and sport utility vehicles combined for the first time in 20 years.

"It's such a new world for us, because as you well know, for the better part of the last two decades we've been a truck and SUV company predominantly," Pipas said. "So this requires a big shift in our culture, in our training and our thinking. Not only for Ford, but our dealers."

Yaris, Prius Drive Toyota

Toyota Motor Corp. said its car sales rose 12 percent, largely on the strength of the subcompact Yaris, which saw sales rise 46 percent and the hybrid Prius, which was up 54 percent. Toyota's truck and SUV sales dropped 8 percent.

"We continue to see that fuel efficiency will remain one of the top priorities for purchasing consumers," said Bob Carter, general manager of Toyota Motor Corp.'s U.S. Toyota division.

Chrysler LLC said sales fell 23 percent, with car sales down 19 percent and truck and SUV sales down 25 percent. The Jeep Commander SUV saw sales plummet 49 percent. Steven Landry, Chrysler's executive vice president of North American sales, said that was partly due to a 33 percent drop in low-profit fleet sales. Ford and GM cut fleet sales as well.

Retail gas prices began April at $3.26 a gallon nationwide but crept up to $3.57 per gallon by the last week, according to the U.S. Department of Energy. They set a record on April 30, rising to a national average of nearly $3.62 a gallon.

Pickup sales have been falling for months because of the slowdown in housing construction, and the trend away from SUVs began several years ago as baby boomers aged and roomy but more fuel efficient crossover vehicles gave consumers more choice. But automakers said gas prices are boosting the trend.

"At $3 a gallon, there's a lot of discussion about the price of gasoline but not much change in behavior. But in the mid-$3.50 range with $4 on the horizon, there's a lot of change in behavior," said Mike Jackson, the chief executive of AutoNation Inc., the country's largest auto retailer.

Jackson said it will be interesting to see if the change is permanent or if consumers return to larger vehicles once their initial shock at the pump has worn off and the economy improves. On Thursday, GM, Toyota and Chrysler officials all said they think conditions will improve this year.

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