Business

Small-car sales grow as gas prices get close to $4

DETROIT — Small cars sold briskly in the U.S. last month, as gasoline prices approached $4 a gallon and some buyers worried about shortages of Japanese-made vehicles.

Analysts expected overall industry sales in the U.S. to increase 19 percent from April of last year.

Sales last month were led by highly fuel-efficient models such as Chevrolet's Cruze, Hyundai's Elantra and Ford's Focus.

Don Johnson, GM's vice president of sales and marketing, said consumers shifted into smaller cars starting in March and the trend continued in April. Unlike 2008, when a rise in gas prices caught the industry off-guard, GM and other companies have good small cars and can quickly boost production of them, he said.

While widespread vehicle shortages related to the March 11 earthquake in Japan have yet to hit the U.S. market, they're expected to by the end of May. That may have spurred people to buy cars like the subcompact Honda Fit in April. On Monday, Honda Motor Co. warned dealers that the 2012 Civic, as well as other models, will be in short supply this summer. It also pushed back the fall launch of the CR-V by a month.

So far, GM says the earthquake won't affect its profit, although it has had to slow production because of a lack of parts from Japan. Chrysler Group said this week that the earthquake will cost it between 50,000 and 100,000 vehicles this year, but it won't have an impact on earnings.

Hyundai Motor Co.' s sales jumped 40 percent, largely because of fuel-efficient models such as the Elantra.

General Motors sold more than 25,000 Chevrolet Cruze compact models in April, the best performance since it was introduced in October. Ford said sales of its new Focus compact rose 22 percent from last year.

GM said its U.S. car and truck sales jumped 26 percent in April, led by the shift to small cars.

Ford Motor Co. said its U.S. sales rose 13 percent, largely because of a 26 percent jump in car sales. But it wasn't only the most efficient cars like the Fiesta and Focus that buyers demanded. Sales of the Mustang sports car rose 59 percent.

Ford said the impact of gas prices could be felt in its largest vehicles. Half of all pickup buyers chose Ford's new V-6 engine instead of the less efficient V-8.

Sales were strong despite automakers' decision to ease up on deals in April. Total U.S. incentive spending by automakers fell $250 to $2,118 per vehicle from March, according to Edmunds.com. That was the lowest level since October 2005, when automakers pulled back sharply on discounts after the employee-discount-for-everyone deals that summer.

"This is the clearest indication yet that automakers are gearing up for inventory shortages," Jessica Caldwell, director of industry analysis for Edmunds, said in a statement.

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