Tags: Incentive | Truck | Seller | April

Generous Incentives Made Trucks Big Sellers in April

Thursday, 01 May 2014 03:56 PM

Trucks trumped cars in April as automakers turned on incentives to sell pickups.

General Motors Co., Ford Motor Co., and Chrysler Group LLC Thursday all reported sales increases of trucks in the U.S. last month. GM’s gains helped boost overall deliveries by 6.9 percent as the automaker grapples with a recall of 2.59 million small cars linked to at least 13 deaths. Analysts had projected that Detroit-based GM would post a gain of 5.7 percent, on average.

Ford, as it named Mark Fields its new chief executive officer, said pickup sales rose 9.1 percent, while cars fell 8 percent with overall deliveries down 0.8 percent. Analysts had projected a 3.1 percent rise. Chrysler’s 17 percent jump in Ram pickups and 52 percent surge in Jeep brand sport-utility vehicles weren’t enough to top estimates for a 16 percent rise. Chrysler’s 14 percent gain marked its best April since 2007.

Pickup sales were helped by pent-up demand coming out of January and February when bad winter weather kept buyers away from showrooms and suggests contractors are feeling more confident about housing starts, Mark Wakefield, leader of AlixPartners LLP’s automotive practices in the Americas, said Thursday in a telephone interview.

“The cold snap recovery has quite a bit to do with it,” he said. “I don’t think we’re seeing a mass return to the urban cowboy that we had before.”

Toyota, Honda

Toyota Motor Corp. sales rose 13 percent to 199,660, matching analysts’ estimates. The automaker, based in Toyota City, Japan, saw U.S. truck and car deliveries advance 17 percent and 11 percent, respectively. Sales of the full-size Tundra pickup rose 23 percent.

“For Toyota, truck sales continue to soar,” Bill Fay, Toyota division group vice president and general manager, said in a statement.

Nissan Motor Co. sales rose 18 percent, exceeding the 14 percent average of analysts’ estimates. The company’s car sales also bucked the declining trend with a 24 percent gain as Nissan Versa deliveries jumped 46 percent.

Honda Motor Co.’s sales of Honda and Acura brand autos rose 1.1 percent last month to 132,456, the company said in separate Twitter posts. That was below an expected 3.3 percent increase.

Hyundai Motor Co. and Kia Motors Corp., affiliated South Korean automakers, reported a combined sales gain of 8 percent, topping an expected 5.9 percent increase. Hyundai’s sales grew 4.4 percent to 66,107, and Seoul-based Kia’s jumped 13 percent to 53,676, the companies said in separate statements.

“Right across the board, we’re seeing really high incentives on trucks,” Larry Dominique, president of Santa Barbara, California-based Truecar Inc., said Thursday in an interview. “If you’re going to buy a full-size truck, now’s a pretty darn good time.”

Cruze, Malibu

GM, the nation’s largest automaker, reported sales of 254,076 in April. Deliveries of the Chevrolet Silverado pickup rose 8.5 percent while those of GMC Sierra trucks increased 21 percent. Sales of GM’s large sport-utility vehicles, including the Chevrolet Tahoe, gained 22 percent, the company said in an e-mailed statement. Deliveries of GM’s Chevy Cruze small car slid 1.3 percent and the mid-size Malibu dropped 8.2 percent.

With GM’s recent introduction of heavy duty and full-sized SUVs, “we believe sales of these vehicles are finally hitting their stride and we project continued sales strength and market share gains,” Joseph Amaturo, an analyst with Buckingham Research Group, said in a note Thursday to investors.

GM Incentives

GM said it used “strategic” discounts to boost sales of its Chevrolet Silverado and GMC Sierra pickups, aiming incentives on double-cabs and V-6 models where the company felt it was losing share to price competition. Incentives as a percentage of average transaction prices rose to 12.4 percent in April from 10.2 percent in the first quarter, GM said, citing data from J.D. Power & Associates. The company noted that its incentives on large SUVs and heavy duty trucks declined.

Ford reported U.S. light-vehicle sales of 210,355 last month, the Dearborn, Michigan-based automaker said in a statement. Deliveries of the Ford Focus fell 15 percent while F- Series pickups rose 7.4 percent. Ford said it trimmed discounts on its F-Series in April by $380 from a year earlier to $3,700 a truck.

Deliveries of Chrysler’s outgoing 200 sedan plunged 66 percent, as the company’s car sales dropped 26 percent. Chrysler’s results were hurt by a 26 percent drop for the compact Dart. Ram pickup sales rose to 36,674.

Jeep SUVs

“Strong consumer demand for our Jeep sport-utility vehicles and Ram pickup trucks continued in April,” Reid Bigland, Chrysler’s U.S. sales chief, said in the statement.

Sales rose 8.1 percent to 1.39 million light vehicles, said Autodata Corp. The annualized pace, adjusted for seasonal trends, was 16 million, according to the Woodcliff Lake, New Jersey-based researcher. The average of analyst estimates was for a 16.2 million annualized pace on 1.4 million light-vehicle sales.

Fiat SpA-owned Chrysler forecast an annual sales pace of 16.3 million, including medium-duty and heavy trucks, which typically account for at least 200,000 sales a year. GM said the pace may be 16.1 million, excluding medium- and heavy-duty trucks.

Dodge brand sales rose by 50 to 53,463 in April, hurt by the Dart and outgoing Avenger, the company said Thursday. Fiat sales rose 10 percent to 4,298 deliveries.

The latest consumer confidence survey, which rose in April to a nine-month high, showed Americans are growing more upbeat about the economy as the labor market gains traction. Consumers were more optimistic about current conditions than at any time since July 2007 as smaller ranks of the unemployed, near-record stock prices and higher property values help bolster household finances.

The Thomson Reuters/University of Michigan final index of sentiment increased to 84.1 from a four-month low of 80 in March. The median projection in a Bloomberg survey of economists called for 83 after a preliminary April reading of 82.6.

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Trucks trumped cars in April as automakers turned on incentives to sell pickups. General Motors, Ford, and Chrysler Thursday all reported sales increases of trucks in the U.S. last month.
Incentive, Truck, Seller, April
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2014-56-01
Thursday, 01 May 2014 03:56 PM
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