Trucks Beat Cars in April as Automakers Boost Incentives – Bloomberg
Trucks trumped cars in April as
automakers turned on incentives to sell pickups.
“Right across the board, we’re seeing really high
incentives on trucks,” Larry Dominique, president of Santa
Barbara, California-based Truecar Inc., said today in an
interview. “If you’re going to buy a full-size truck, now’s a
pretty darn good time.”
Ford Motor Co. (F) and Chrysler Group LLC reported April U.S.
sales that missed estimates as car sales fell for both U.S.
automakers. General Motors Co. (GM), grappling with a recall of 2.59
million small cars linked to 13 deaths, beat estimates as
deliveries of its pickups and SUVs rose, offsetting declines by
Chevrolet Cruze and Malibu sedans.
Ford said it trimmed discounts on its F-Series pickups in
April by $380 from a year earlier to $3,700 a truck. GM said it
used “strategic” discounts to boost sales of its Chevrolet
Silverado and GMC Sierra pickups. 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.
Industrywide sales may rise less than analysts projected as
car sales failed to keep up with demand for pickups and SUVs.
Ford’s car sales fell 9.1 percent, with its Focus dropping 15
percent, while truck sales rose 8 percent, the company said.
Deliveries of Chrysler’s outgoing 200 sedan plunged 66 percent,
as the company’s car sales dropped 26 percent. Deliveries of
GM’s Chevy Cruze small car slid 1.3 percent and the mid-size
Malibu dropped 8.2 percent.
Toyota Motor Corp. (7203) sales rose 13 percent, matching analysts’
Ford reported U.S. sales that decreased 0.8 percent to
210,355, the Dearborn, Michigan-based automaker said in a
statement. That missed the average of 10 analysts’ estimates,
who projected a gain of 3.1 percent. Chrysler Group reported
sales of 178,652, a 14 percent gain. While it was Chrysler’s
best April since 2007, the results fell short of eight analysts’
estimates for a 16 percent increase as car sales fell 26
GM, the nation’s largest automaker, reported sales of
254,076 in April, a 6.9 percent gain. Deliveries of the
Chevrolet Silverado pickup rose 8.5 percent while GMC Sierra
truck increased 21 percent. Deliveries of GM’s large sport-utility vehicles, including the Chevrolet Tahoe, gained 22
percent, the Detroit-based company said in an e-mailed
statement. Ten analysts surveyed by Bloomberg projected an
average gain of 5.7 percent for GM last month.
GM said it increased its share of trucks sold with average
transaction prices below $40,000 compared with the first quarter
of 2014 and maintained its share of trucks with premium content.
Nissan Motor Co. sales rose 18 percent, exceeding the 14
percent average of analysts’ estimates. The company’s car sales
bucked the trend with a 24 percent gain as Nissan Versa
deliveries jumped 46 percent.
For Chrysler, Jeep brand sales increased 52 percent, the
Auburn Hills, Michigan-based automaker said today in a
statement. Chrysler’s results were hurt by a 26 percent drop for
the compact Dart. Ram pickup sales rose 17 percent to 36,674.
“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.
Industrywide sales for April may rise 9 percent to 1.4
million light vehicles, the average of 11 analyst projections.
The annualized sales rate, adjusted for seasonal trends, may
advance to 16.2 million from 15.3 million a year earlier. In
March, the pace was 16.4 million.
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
Dodge brand sales rose by 50 to 53,463 in April, hurt by
the Dart and outgoing Avenger, the company said today. Fiat
sales rose 10 percent to 4,298 deliveries.
Honda Motor Co. may report a 3.3 percent increase.
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
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.
Chrysler has logged more than four years of monthly sales
increases in the wake of its government-sponsored bankruptcy.
Much of the growth has been powered by models such as the Jeep
Grand Cherokee and Cherokee, the Ram 1500 pickup and the Dodge
Durango, which the company redesigned in recent years.
Its new 200 family sedan, which hits dealer showrooms this
month, is Chrysler’s attempt to claw its way higher in one of
the most fiercely contested corners of the U.S. auto market, the
$5.8 billion-a-year segment for mid-size sedans. While Honda,
Toyota are less dominant than they were a decade ago, their
Accords, Camrys and the Nissan Motor Co. (7201) Altima still account
for 48 percent of U.S. sales volume in the segment, according to
Autodata Corp. The existing Chrysler 200 is eighth out of 12
models in the segment.
IHS Automotive predicts that Chrysler is poised to sell
180,000 of the cars a year by 2016, up almost 50 percent from
last year’s mark and enough to give the vehicle the seventh spot
in the segment, if others’ sales were to remain steady.
The new 200, with a sleek shape and headlights arranged
into a scowl, starts at $22,695, including destination fees. It
can go head to head with competitors, said several industry
“For the price and the value, there is nothing better on
the market,” Al Gardner, chief executive officer of the
Chrysler brand, said in an interview. “The question is, can we
get that customer to walk in the showroom and give us a chance
to show how good it really is?”
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Jamie Butters at