US car sales rise on shift to smaller vehicles

US car sales picked up in April as soaring petrol prices spurred Americans to ditch larger vehicles in favour of smaller, more energy-efficient cars.

General Motors, the largest Detroit carmaker, reported a 26 per cent rise in sales from April 2010 to 232,538 vehicles last month as customers snapped up its compact and crossover vehicles.

Sales grew by 16 per cent at Ford, the number-two US carmaker by revenue, and by 12.2 per cent at Japan-based Nissan on strong demand for smaller, hybrid and electric models. Toyota, which has strugged with production delays following the Japanese earthquake, reported a more modest 1.3 per cent rise, while sales at Chrysler, the smallest of the big three Detroit automakers, gained 22 per cent.

The companies said that as Americans face higher prices at the pump, more consumers are choosing smaller, efficient cars. Petrol prices have soared 37 per cent over the past year to nearly $4 a gallon, approaching the highest levels seen since mid-2008. The average price for a gallon is now $3.97, according to AAA, the motoring club.

“Recently, rising fuel prices have led many to rethink their vehicle choice,” said Don Johnson, GM’s vice-president for US sales operations.

“Fuel-efficient cars stole the New York auto show last week,” said Michelle Krebs, an analyst at Edmunds.com, the online car pricing service. “This trend may stick as being green and frugal appeals to many consumers recovering from the recession and looking ahead to the future.”

GM sales to retail customers were up 25 per cent on year, led by the Chevrolet Cruze, which had its best month of sales since it was launched in autumn 2010. GM dealers sold 25,160 Cruzes last month, more than any other vehicle except the Chevrolet Silverado pick-up truck. Overall, sales of GM passenger cars surged 59 per cent in April.

Demand for “crossover” sports utility vehicles, which are more fuel-efficient than traditional SUVs, was also higher, rising 28 per cent, with sales of the Chevrolet Equinox and GMC Terrain hitting new records.

At Ford, sales rose to 189,778 vehicles, with retail sales climbing 10 per cent from a year ago. Sales were spurred by demand for the compact Fiesta and Focus and the hybrid Fusion, which set a monthly sales record in April and was the company’s best-selling car. The popularity of Ford’s smaller vehicles boosted first-quarter profits to the highest level in 13 years.

Customers also were drawn to Ford’s SUVs, with sales of the new Explorer more than doubling from a year ago to 12,593, the strongest month for the model since 2006. Sales of the smaller Escape rose 11 per cent to a record 21,240. Ford’s signature Mustang sports car surged 59 per cent to 6,586.

Appetite for SUVs and trucks also lifted sales at Chrysler by 22 per cent to 117,225, “even in the face of rising gas prices at the pump,” said Fred Diaz, chief executive of Chrysler’s Ram truck brand.

Toyota’s sales of 159,540 were driven entirely by its namesake division, where sales rose 2.1 per cent in April, led by the Camry, its best-selling model. Demand was also stronger for Toyota’s compact and hybrid SUVs and for the youth-targeted Scion.

But sales of the Prius, the world’s top-selling hybrid, were nearly unchanged from a year ago at 12,477 and well below March’s 18,605, while sales at Toyota’s luxury Lexus division fell 4.3 per cent from last year. Earlier on Tuesday, the company reported that its Japanese sales fell 69 per cent in April due to continuing disruptions from the March quake.

Nissan has also been hit by production delays, but it said April sales rose 12.2 per cent to 71,526 vehicles as consumers chose cars with higher fuel-economy ratings, including the compact Sentra and the Rogue compact SUV. Nissan sold 573 all-electric Leafs, bringing total US sales of the battery-powered vehicle to 1,044 since it was introduced in December.

Rising sales in the US came in spite of sharp cuts to the discounts and incentives dealers offer to entice buyers. GM noted that its April retail sales were 4 per cent higher than in March even though the company cut incentives by 10 per cent.

Figures compiled by Edmunds.com showed that US carmakers’ discounts were down 10.6 per cent in April from March and 19.6 per cent below their year-ago level. The average discount on a new car was $2,118 last month, the smallest since October 2005. GM’s average discount in April was $3,016 while Ford’s was $2,421, Nissan’s was $1,886 and Toyota’s was $1,687, Edmunds.com said.

“This is the clearest indication yet that automakers are gearing up for inventory shortages,” said Jessica Caldwell, Edmunds.com’s director of industry analysis. “Demand for new cars has been growing as economic recovery has strengthened, but now the industry may experience a hiccup if consumers decide to wait for the next deal to come around, which may not be until the autumn.”

GM shares were up 2.5 per cent to $32.98 in New York on Tuesday afternoon while Ford shares were down 1 per cent at $15.29.