Car sales up for best April since 2007

Car sales up for best April since 2007

May 2nd, 2013 by Associated Press and Staff Report in Business Around the Region

New Volkswagen Passats await transport outside of the Chattanooga assembly plant.

Photo by Dan Henry /Times Free Press.

Hamilton County

April car sales

Cars: 610 last month, up 2.7 percent from a year ago

Trucks: 585 last month, up 5.2 percent from a year ago

Source: Hamilton County Clerk's Office titles for new vehicles

Volkswagen Passat sales

April: 9,069, down 10.2 percent from a year ago

Year to date: 34,978, up 1 percent from a year ago

Source: Volkswagen of America

Detroit was king in April, with demand for its big pickups helping to boost U.S. auto sales and offset a soft month for Volkswagen and Toyota.

Ford, GM and Chrysler sold a total of 144,042 full-size pickups, up 29 percent from last April, driven by strength in the U.S. housing industry.

Overall vehicle sales grew 8.5 percent last month to nearly 1.3 million -- the best April total since 2007. But the pace slowed from the first three months of this year. On an annualized basis, April sales were 14.9 million, the first month below 15 million since October.

In Hamilton County, both car and truck sales were ahead of year-ago levels during April.

But Volkswagen and Toyota reported lower sales than a year ago last month.

Volkswagen of America, Inc. said April sales were 10.3 percent below last year as more car buyers shifted to light-duty trucks and SUVs.

VW of America President Jonathan Browning said the Chattanooga-made Passat also faced increased competition from other midsize sedans. Four of the six major car makers introduced new midsize sedans in the past year and that segment of the car market grew by less than 3 percent.

VW said it delivered 33,644 units in April, including 9,069 Passat cars made in Chattanooga. Passat sales were down in April by 10.2 percent from a year ago.

The slowdown in sales led VW to decide last month to cut its staff of contract workers in Chattanooga by 500 employees by June.

"While it was a challenging month, particularly in the compact and midsize sedan segments, we remain solidly focused on our long term growth strategy," Browning said. "In spite of segment challenges with robust competition, the Jetta sedan and Passat showed strength in April and so far this year."

Despite last month's sales decline, Passat sales so far this year are still up by 1 percent over last year. In the first four months of 2013, VW delivered 34,635 Passats.

More than 30 percent of the Passats sold last month were diesel brands.

Toyota's U.S. sales dropped by 1 percent, or around 2,000 vehicles, from last April. Popular Toyota vehicles such as the Corolla and Camry sedans lost sales to fresher models such as the Hyundai Elantra and the Ford Fusion. Gas prices -- which are 30 cents cheaper than at this time last year -- hurt sales of the Prius hybrid, down 21 percent. Toyota's share of the market fell to 13.7 percent from 15 percent a year earlier, putting it behind GM and Ford.

Analysts still expect the industry to sell more than 15 million cars and trucks this year. Alec Gutierrez, a senior market analyst with Kelley Blue Book, is keeping his forecast at 15.3 million. That's up from sales of 14.5 million last year.

"We're not reading too much" into the April number, Gutierrez said.

Ford, General Motors and Chrysler reported double-digit sales increases last month. Nissan led Japanese automakers with a gain of 23 percent, while Honda's sales rose 7 percent.