U.S. Car Sales Up in April

Boosted by a rebounding economy, U.S. auto sales jumped 20 percent in April as several car makers, including hard-hit Chrysler Group LLC, posted sizable gains, The Wall Street Journal reported.

Automakers sold 982,131 vehicles last month, according to Autodata Corp., up from the depressed level of 819,540 in April a year ago, when the U.S. was sliding deeper into recession and General Motors Co. and Chrysler were heading toward bankruptcy filings.

Chrysler, Ford Motor Co. and Toyota Motor Corp. all reported increases of about 25 percent. GM's growth was limited to 7.2 percent because it its phasing out four brands under its restructuring, but the four brands it is keeping—Chevrolet, Cadillac, Buick and GMC—saw sales rise 20 percent.

Ford economist Emily Kolinski Morris said the recent growth in U.S. gross domestic product—it rose 3.2 percent in the first quarter—is supporting a recovery in car sales. Ford is forecasting that 2010 sales industrywide will rise to 11.5 million to 12.5 million vehicles, up considerably from last year's 10.4 million.

Autodata said the annualized sales pace in April was about 11.21 million vehicles, slower than the rate of 11.78 million in March, but a clear step up from the year-ago figure of 9.23 million.

The month-over-month drop in the sales pace reflects the weakening impact of buyer incentives over time, said Jessica Caldwell, an analyst at Edmunds.com, an automotive website. In March, Toyota boosted incentives to halt a sales slide caused by its recalls and quality crisis. Other car makers did the same and a surge of buyers came into the market.

But in April, "there weren't as many deal-seekers," Caldwell said. "A lot of the people who were looking for deals have already bought." April also is income-tax time, which tends to keep some shoppers away, she added.

In April, Ford's light-vehicle sales rose 24.9 percent to 167,283. The total includes sales of 4,546 vehicles by Volvo, which Ford is in the process of selling.

Ford was boosted by a 42 percent increase in sales of its F-150 pickup trucks, to a total of 40,946 in April. That's a good sign for the economy—pickup sales are closely tied to the housing industry since the trucks are favorites of contractors and builders.

Toyota's sales grew at almost the same pace as Ford's, rising 24.4 percent to 157,439 vehicles from a year earlier. Toyota said it is extending its U.S. incentive program for a third month as it uses zero-percent financing and free maintenance to spark demand. Toyota's luxury Lexus brand also is offering cheap lease and financing for the first time.

GM sold 183,614 light vehicles, up 7.2 percent, with its four core brands generating almost all of the total. The brands it is phasing out or selling—Pontiac, Saturn, Hummer and Saab—accounted for 906 sales, a huge drop from their year-ago total of 20,010.

Chrysler, meanwhile, finally started keeping pace with the rest of the industry. Its April sales rose 24.8 percent to 95,703 vehicles. In previous month its sales declined or grew at lower rates than other auto makers.

The company declined to say what percentage of sales went to fleet customers such as rental companies. In some past months 40 percent to 50 percent of its sales went to fleets. Fleet sales usually have lower profit margins than sales to individual customers. Most rental cars also eventually come back onto the market as used vehicles, which can undermine prices of new models.

Chrysler's minivan sales jumped and sales of the Chrysler Sebring and Dodge Avenger, sedans favored by rental fleets, rose three-fold and four-fold, respectively.

Among other makers, Hyundai Motor Co. said its U.S. sales rose 30 percent to 44,023 vehicles, Nissan Motor Co.'s were up 35.1 percent to 63,769, and Honda Motor Co. saw a rise of 12.5 percent, to 113,697.