In the face of a sluggish economy and record-setting oil prices, American consumers bought just 14.46 million vehicles this month, down from 16.29 million units last April. Industry forecasters are predicting that 2008’s total sales will be down about a million units from the previous year; the biggest one-year sales drop since 1991. Particularly worrisome to dealers, the industry’s average retail transaction price ($27,238 through April 27) declined for the first time in four years when compared with the same month a year earlier.
International Brands Weather Downturn
International brands have been somewhat insulated from 2008’s downturn in sales. Their fleets are less weighted toward trucks and SUVs, offer more affordable, gas-friendly vehicles, and in some cases appeal to luxury buyers who are less likely to be counting pennies. As a result, international nameplates were actually up 4.7 percent when compared to April ’07 sales figures (note: AIADA’s numbers are unadjusted for April 2008’s two extra selling days). Domestic nameplates were down 16.8 percent from the same month a year ago. And while year to date sales are down across the board, international carmakers are looking at a far less damaging drop of 1.9 percent, compared to domestics which are down 12.9 percent.
None the less, 2008 continues to be frustrating year for all automakers.
Toyota reported its fifth consecutive month of year-to-date sales declines, due in part to a steep drop in sales of SUVs and trucks like the Tundra. "We’re into the second quarter, and it’s clear that the U.S. economy continues to move through a period of weakness," said Bob Carter, head of the Toyota division in the United States, in a statement.
Economy to Blame
Oil prices and an anemic economy are to blame for 2008’s weak auto sales. Most industry analysts agree: the quality and choice available on dealer’s lots are second to none; consumers are simply too wary to buy. Of course, there is a silver lining. The consumers who are currently putting off purchases and taking a ‘wait and see’ approach to the economy will eventually need to replace their old cars in order to meet their current needs. Automakers seem confident that the tide will turn, and in a matter of months buyers will return to the market. "Consumers are delaying their purchases now, but it’s going to recover in the future," Bob Carter said.
Honda continues Steady Growth
Honda was one of the bright stars of April. Its year-to-date sales are up 3.7 percent and its April’s sales were up 9.8 percent from the previous year. The strongest performers in the Honda brand were the compact, fuel-efficient Fit and the redesigned Accord. Fit sales jumped 50 percent to 5,938 vehicles, while Accord sales grew 20 percent to 34,628. "Selling conditions are certainly tough, but at Honda we see this as an opportunity," said Dick Colliver, executive vice president of American Honda. "In difficult times, consumers make very rational, thoughtful purchase decisions, which play into Honda’s core brand strengths of fuel economy, safety and quality."
Along with Honda’s Civic and Accord, Toyota’s Camry was one of the top five retail-sellers this month.
Truck Sales Plunge
In April, buyers continued to abandon high-margin trucks and SUVs in favor of cheaper and more fuel-efficient cars. Gas prices, reaching four dollars in many parts of the country, and record-high oil prices are partly to blame.
Total SUV sales from the same time last year are down 14.6 percent, and pickup sales are down an eye-popping 20 percent. Pickups may one day recover from today’s low levels of around 11 percent of total sales, but industry insiders say sales may never return to the record levels of 2005, when full-size pickups made up about 15 percent of total U.S. sales. Meanwhile, the small car segment, led by the Toyota Yaris with 11,434 sold this month, saw an 18.6 percent jump from last April.
See below for a complete breakdown of April 2008 monthly and calendar-year-to-date sales by international nameplate.