April Sales Show Decline

May 1, 2003

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Sales of new vehicles in April declined from their blistering pace a year ago, but the world’s automakers generally found encouraging signs in the numbers from the U.S. market.

The annual sales rate of 16.5 million was an improvement over March, when sales were closer to 16 million units, but not as strong as some analysts had predicted and down substantially from the 17.2-million unit pace posted in April 2002.

Honda, Hyundai and Porsche, thanks to the introduction of new Cayenne, all posted double digit sales increases.

But the Chrysler Group, General Motors, Mitsubishi, and Volkswagen watched their sales skid last month. Chrysler sales fell ten percent, GM’s dropped nine percent, while Mitsubishi’s fell seventeen percent and Volkswagen’s dropped sixteen percent.

Even Toyota, the leading Japanese automaker, watched its sales drop one percent on an adjusted basis, while Kia’s dropped four percent and Ford Motor Co. watched its sales decline 2.9 percent.

“April was a tough month for the automotive industry,” Gary Dilts, Chrysler Group Senior Vice President - Sales, said Thursday.

Positive signs in the mix

Dilts, however, said even though the market was soft in April, Chrysler still saw some positive signs. “Looking forward, we see positive indicators. The affordability index is the best it’s been in the past 25 years and interest rates remain at near all-time lows,” said Dilts.

Dilts added Chrysler already has sold 1806 of the new Pacifica and has orders from dealers for another 27,000.

“With the situation in Iraq stabilizing, consumers are feeling more secure and more confident. Industry sales should benefit as economic recovery trends continue to improve,” said Jim Press, Toyota Motor Sales executive vice president.

Jim O’Connor, Ford Group vice president for sales and marketing, said he was encouraged by higher consumer confidence readings. “A more confident consumer enhances the prospect that consumer spending will improve in the second half of the year,” O’Connor added.

Ford’s Mustang had its best sales month since October 2001 as 17,412 customers stampeded to Ford dealers and saddled up America’s legendary pony car, enticed by an historic offer on the eve of Ford’s centennial. Mustang sales were 32 percent higher than a year ago, O’Connor added.

“Mustang fever was elevated higher than we expected,” said O’Connor, “Extending the $5-a-day lease offer was one of the easiest decisions we’ve ever made.” The special Centennial $5 a day lease on Mustang and Ranger, America’s best-selling compact pickup, has been extended to June 16.

Volvo dealers reported record April sales of 10,895, up 21 percent from a year ago. April was the sixth month in a row of higher sales at Volvo — a streak that started with the introduction of the XC90, the award-winning sport-utility vehicle, Ford officials said.

GM boosts incentives

In the face of a nine-percent drop in sales during April and the loss of additional market share, General Motors has extended its incentives through May and into early June. Sales of GM trucks increased two percent but sales of GM cars plunged 22 percent last month despite big incentives.

The new GM incentive plan offers interest-free financing for 60 months for qualified buyers on the purchase of all new 2003 GM Buick, Chevrolet (except Corvette), GMC, Oldsmobile, Pontiac, Saab, and Saturn vehicles. Alternatively, GM is offering very competitive cash rebates of up to $3000 on most 2003 vehicles.

“Both GM and the industry had a solid month in April, despite some hesitation in consumer attitudes,” said John Smith, group vice president of GM North America Vehicle sales, service and marketing.

Smith noted sales of GM luxury vehicles, large pickups and large utilities were relatively strong last month. “We expect continued improvement in our results over the course of the year,” Smith said.

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