May 1 (Bloomberg) -- U.S. auto sales tumbled 34 percent in April, the 18th straight monthly decline, as Chrysler LLC’s slide toward bankruptcy helped shrink the industry more than analysts estimated.
Chrysler’s U.S. deliveries fell 48 percent in joining Toyota Motor Corp., Ford Motor Co. and Nissan Motor Co. with decreases that were worse than analysts expected. General Motors Corp. and Honda Motor Co. sales dropped less than projections.
April ended with Chrysler’s Chapter 11 filing, the swine flu outbreak and GM still racing to beat a June 1 deadline to restructure without ending up in court, tempering any benefits from rising consumer confidence.
“The cloud of bankruptcy is still very much hanging there,” said Rebecca Lindland, an IHS Global Insight analyst in Lexington, Massachusetts. “We can’t just see these little glimmers of hope in consumer confidence. We need to see an actual sustained recovery in the economy.”
April sales ran at a seasonally adjusted annual rate of 9.3 million units, according to industry research firm Autodata Corp. of Woodcliff Lake, New Jersey. That missed the 9.9 million estimate of 7 analysts surveyed by Bloomberg.
Lindland said she expects the rate to fall to 9 million in May and June. The March rate was 9.9 million, after February’s 9.1 million came in as the lowest since 1981. Sales totaled 13.2 million in 2008, and averaged 16.8 million this decade through 2007.
Automakers’ Decreases
Industrywide deliveries slid to 819,171. Ford slumped 32 percent, Toyota tumbled 42 percent and Nissan fell 38 percent. GM decreased 34 percent, and Honda dropped 25 percent from a year earlier.
Automakers took comfort from the 34 percent industrywide decline, which was the smallest this year.
“It seems like we’re bouncing around at the bottom of a bathtub,” Chrysler Vice Chairman Jim Press said in a conference call. “We have found the bottom.”
With Auburn Hills, Michigan-based Chrysler in bankruptcy court, the industry’s focus now shifts to GM’s bid to shrink $44 billion in obligations under the deadline set by President Barack Obama or face a government-backed bankruptcy.
‘A Martian’
“I’ve seen everything except that a Martian is going to run General Motors,” the automaker’s sales chief, Mark LaNeve, said on a conference call. “We’ve been fighting every one of these rumors, and I can tell you they don’t help sales.”
GM beat the average estimate for a 37 percent sales decline, based on a survey of 5 analysts. Purchases by fleet customers buoyed results, while sales to individual consumers fell 45 percent, Detroit-based GM said. Honda was projected to drop 27 percent, based on 4 estimates.
Ford’s slide exceeded the 30 percent average estimate among 5 analysts surveyed by Bloomberg, and Chrysler outstripped projections for a 37 percent drop. Toyota’s decline was greater than the 37 percent average of 4 estimates, while Tokyo-based Nissan’s slump exceeded a projected decrease of 28 percent. April had 26 selling days, the same as a year earlier.
Ford said sales slowed in the last week of April, which it attributed to heavy news coverage of the bailout plans for GM and Chrysler, as well as reports about the new flu strain.
“There was a bit of a CNN effect this week with the news focusing on Chrysler and GM,” Ford’s sales analyst, George Pipas, said in a conference call.
Ford Tops Toyota
Ford outsold Toyota City, Japan-based Toyota in April, 134,401 vehicles to 126,540, to take the No. 2 U.S. sales position behind GM. For the year, Toyota remains ahead of Dearborn, Michigan-based Ford by 27,400 cars and trucks.
South Korea’s Hyundai Motor Co. posted the smallest decline among major automakers, sliding 14 percent. Kia Motors Corp., Hyundai’s affiliate, reported a 15 percent decrease.
Automakers’ spending on incentives averaged $3,031 for each vehicle, a 29 percent increase from a year earlier, according to automotive researcher Edmunds.com of Santa Monica, California. Still, that was down from the record of $3,165 in March.
Honda’s increased incentives for Accord allowed the car to become the top-selling U.S. model, surpassing Ford’s F-Series pickups and Toyota’s Camry sedan.
Average incentive spending rose 7.9 percent at Honda to $1,439 a vehicle, Edmunds.com said. Chris Martin, a Honda spokesman, wouldn’t give a figure, while Bob Carter, Toyota’s U.S. vice president of sales, said Accord incentive spending surged “more than 50 percent” last month.
Economic Impact
Consumer sentiment surged last month to its highest since before the collapse of credit markets late last year, according to a Reuters/University of Michigan index released today.
“It’s all about credit and confidence,” said Michael Robinet, an analyst at CSM Worldwide in Northville, Michigan. “Credit continues to free up, albeit at a slow pace, and we’re not seeing confidence degrade like we have in the past.”
While the government may say May 8 that unemployment rose to 8.9 percent from 8.5 percent in March, job losses likely eased in April, based on Bloomberg surveys of economists. The drop in nonfarm payrolls was projected to be 610,000, 8 percent fewer than a month earlier.
A 9.4 percent gain for the Standard & Poor’s 500 Index, the biggest monthly rally since March 2000, also may have eased consumers’ alarm over Wall Street’s tumble late last year. As of today, the benchmark index for U.S. stocks needs to rise only 2.9 percent to erase its 2009 loss.
Those signs of life for the stock market and confidence will position auto sales for a modest second-half recovery, said Gary Dilts, an analyst at market-research firm J.D. Power & Associates in Troy, Michigan.
“It’s nothing to have a party over,” Dilts said. “But we’ve reached the point where there’s just not much lower that you can go.”
Source
(2009-10-21) 
[top photo: A room in Festive Hotel. The family-friendly hotel has designed most of its room with loft beds for children, while parents will have separate sleeping chambers.]
A room in the Maxims Tower.
