From the Wall Street Journal online. wsj.com Great site to subscribe to:

DETROIT -- U.S. auto sales surged in April, rebounding from a slow start at the beginning of 2005 and boosting hopes for growth through the remainder of the year, despite the prospect of rising gasoline prices and moderating economic growth.
New-car sales rose 5.7% in April to 1,504,168 vehicles and light trucks, according to Autodata Corp., with the three top Japanese auto makers scoring further market-share gains over General Motors Corp. and Ford Motor Co., which were again hurt by declining sales of large sport-utility vehicles.

Each of the three big Japanese auto makers reported record sales for April, thanks in part to rebates and other incentives. Toyota Motor Corp. said its U.S. sales in April climbed 26% to 210,466 cars and light trucks. The surge was powered by big sales of small cars such as the Toyota Corolla and Scion xB, and another strong month for the Prius gas-electric hybrid car.

Industrywide, the U.S. market's April sales translated into an annualized selling rate of 17.46 million vehicles, a significant rise from the annual pace of 16.4 million vehicles that the industry hit in the first three months of the year.

COMPLETE NUMBERS


• See a chart of retail U.S. car and light truck sales.



"I would describe the industry's performance as very solid," said Paul Ballew, chief of industry analysis and sales at GM, speaking on a conference call. The U.S. economy faces some "headwinds" in rising interest rates and high oil prices, but Mr. Ballew said GM believes the American economy is "still on very solid footing" and expects industry sales of "just about" 17 million cars and trucks this year. That would be a rise from the 16.8 million cars and light trucks sold in 2004.

GM isn't benefiting much from the industry's strength. In April, its sales fell 4% to 380,535 vehicles. Sales of GM's light trucks, which provide the bulk of the company's profits, slid 14% to 209,917, as large numbers of buyers turned away from large sports-utility vehicles. According to GM, sales of the Chevrolet Suburban and Tahoe, two of GM's top-selling SUVs, plunged 30% and 34%, respectively, in April. The Hummer H2 suffered a sales decline of 25%, and the Cadillac Escalade a drop of 24%.

Sales at crosstown rival Ford slipped 1.6% to 280,031 cars and light trucks. Sales of new cars such as the Ford Five Hundred sedan and "crossovers" such as the Ford Freestyle were higher, but couldn't offset the slide in big SUVs, including the Ford Explorer and Expedition.

Ford and other auto makers blamed high gas prices for accelerating the decline in big SUV sales. Dealers and consumers who have bought SUVs in the past also say they are moving to other vehicles, including passenger cars and lighter crossover SUVs that get better gas mileage. On Monday, the price of a gallon of regular gasoline averaged $2.235 nationwide, up from $2.056 on March 14, according to the U.S. Department of Energy.

But Mr. Ballew insisted GM sees no "large chunk of evidence" that gas prices are directly hurting SUV sales. A bigger factor, he said, is the natural decline in sales that comes as models reach the end of their life cycle. Most of GM's big SUVs -- those accounting for almost two-thirds of the company's full-size SUV sales -- are scheduled to be replaced next year, he noted. There is "no substantial secular decline" in the overall SUV segment, Mr. Ballew said.

A correct reading of the cause of the decline is critical for GM. The company posted a loss of $1.1 billion in the first quarter, and is banking on the launch of its new full-size SUVs next year to drive its recovery.

DaimlerChrysler AG fared better than both Ford and GM, with its vehicle sales rising 9% to 225,386 cars and light trucks, driven by another strong showing by its U.S. arm, the Chrysler Group, which reported sales climbed 9% to 206,546. Chrysler is benefiting from brisk sales of its big Chrysler 300 sedan and its Chrysler and Dodge minivans.

At Toyota, passenger-car sales soared 41% in April. Sales of Toyota's SUVs, which are generally smaller and more fuel-efficient than GM's or Ford's, held up better than its Detroit rivals'. Sales of its biggest SUV, the Toyota Sequoia, were down about 10%, but overall Toyota-brand truck sales rose 9%.

Nissan Motor Co. reported vehicle sales rose 32% to 91,621 cars and trucks, a record for April, with its main Nissan brand posting a gain of 30%. Jed Connelly, Nissan's senior vice president for sales and marketing in North America, said the gains came across several models, with its Altima and Maxima sedans, Murano SUV, Titan pickup truck and Armada large SUV all showing substantial increases in unit sales.

The U.S. arm of Honda Motor Co. also set a record for April, with sales rising 14% to 135,597 vehicles.

The Japanese car makers' gains appeared to come as a result of higher rebates and incentives. According to Edmunds.com, domestic car makers offered average incentives of $3,400 a car, about $200 more than a year ago. Toyota offered much less at $1,060 a car, but that was double its average of April 2004. Nissan's average incentive package increased to $1,820, up from $1,032 a year ago, according to Edmunds.