DETROIT (Reuters) - U.S. auto sales rose 2.3 percent in April, helped by strong gains at Toyota Motor Corp (7203.T) and Chrysler Group LLC, as American shoppers looked to replace their aging cars and trucks and the broader U.S. economy showed signs of strength.
The annual sales rate in April was 14.4 million, in line with the pace projected by economists polled by Thomson Reuters. This was in line with the March rate, but down slightly from the 14.6 million pace reported in the first quarter.
Auto sales are one of the earliest snapshots of American consumer demand and the metric has proven to be a bright spot in the U.S. economy. Despite signs that the overall U.S. economy might lose steam, automakers said they remained optimistic.
“There continue to be a lot of mixed signals out there,” said Toyota brand sales chief Bob Carter. But he said consumers’ pent-up demand for new vehicles coupled with Toyota’s upcoming models would drive sales this year.
“We’re watching consumer confidence and consumer sentiment very closely,” he said.” As both of those indices improve, we’re starting to see more showroom traffic.”
Chrysler and Toyota were the biggest gainers in U.S. market share in April, while General Motors Co (GM.N), Ford Motor Co (F.N), Honda Motor Co Ltd (7267.T) and Nissan Motor Co Ltd (7201.T) all lost share in the month, according to Autodata Corp.
Toyota sales shot up 11.6 percent, spurred by passenger cars led by the Camry sedan and the Prius hybrid. Chrysler sales leapt 20 percent on the strength of models like the 300 sedan.
Both GM and Ford reported smaller-than-expected declines during the month. GM reported an 8.2 percent drop while Ford’s sales fell 5 percent.
GM, the largest U.S. automaker, also raised its full-year sales outlook for the overall industry to as much as 14.5 million vehicles. At the high end of its forecast range, GM projects 2012 sales to be 13.3 percent higher than 2011 levels.
“Despite some persistent headwinds that have come in and out of the market, whether it is the European debt crisis or some uncertainty around fuel prices, we continue to expect gradual improvement in the economy going forward,” GM sales executive Don Johnson told analysts and reporters on a conference call.
Analysts and GM warned that U.S. sales growth over the next few months would slow compared with the first quarter, when the sales pace outstripped even the most bullish estimates.
The industry is now on the mend after its near-collapse in 2009 when GM and Chrysler filed for bankruptcy and sales fell to 10.4 million. By contrast, vehicle sales averaged around 16.7 million a year between 1998 and 2007.
Overall industry sales last month jumped even as consumer incentives fell to their lowest level in nearly seven years, Edmunds.com said. GM said sales of its newly launched Chevrolet Sonic and the Buick Verano helped the automaker raise its average prices by about $150 per vehicle.
“This is the clearest indication yet that consumer motivation is high and that automakers feel little pressure to rely on incentives in order to keep sales churning,” Edmunds.com analyst Jessica Caldwell said.
The April results come after a stronger-than-expected first quarter for the U.S. auto industry, which was boosted by warmer-than-usual weather and a jump in fleet sales that cannot be replicated in the months ahead, analysts said.
Analysts and executives said the sales rate in the second quarter of 2012 would be slower than the first-quarter pace, which reached 14.6 million.
Barclays Capital analyst Brian Johnson projected the sales rate in the current quarter would be between 14.2 million and 14.4 million vehicles. Jonas projected a 14.4 million pace.
“The next couple of months I think will be a repeat of the March-April trend. After that, I think we’ll have to see what kind of strength the economy gets under foot,” GM’s Johnson said during the conference call.
For the full year, GM now sees the U.S. auto industry selling between 14 million and 14.5 million vehicles, up from its previous outlook of 13.5 million to 14 million. In 2011, U.S. auto sales were about 12.8 million.
For 2012, Ford maintained its previous forecast of U.S. auto sales of between 14.5 million and 15 million, which includes medium- and heavy-duty trucks. That would be an estimated 14.2 million to 14.5 million in the light vehicle sales that most of the industry uses as a benchmark.
During the first four months of the year, passenger car sales were up 15 percent, while light truck sales rose just 5.5 percent. In that time, average fuel prices in the United States neared their record price of $4 a gallon.
Chrysler, controlled by Italian automaker Fiat SpA FIA.MI, said sales rose 20 percent to 141,165 vehicles, compared with 117,225 in the same month last year.
Chrysler rose in April on the strength of models like the Chrysler 300 sedan. The No. 3 U.S. automaker has also offered incentives to its dealers to push them to sell more cars and trucks.
GM and Ford said their declines were due to three fewer selling days in April 2012 compared with the year-ago month, a quirk in the calendar that has happened just twice in the past 10 years. When adjusted for the fewer selling days, Ford said its April sales rose 7 percent while GM rose 3 percent. On that same basis, Toyota sales rose 25.5 percent.
GM’s April sales decline to 213,387 new vehicles included a 25 percent drop in fleet sales. Ford sold 180,350 new vehicles compared with 189,778 a year earlier.
Sales of the Ford Escape SUV, which is expected to be replaced later this year, fell by a fifth while Fiesta subcompact sales dropped 44 percent. Executives said the Fiesta sales decline was due in part to consumers choosing the Focus compact car over its smaller stablemate.
Toyota’s sales gain was helped by the lower sales from a year ago, when its U.S. inventory started to feel supply shortages related to the March 11 earthquake and tsunami in Japan.
GM shares ended 1.3 percent higher at $23.31 on Tuesday, while Ford shares dipped 0.4 percent to $11.23.
Reporting By Deepa Seetharaman and Bernie Woodall; Editing by Gerald E. McCormick, John Wallace and Matthew Lewis