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Auto sales tank in April but Chrysler bucks trend

From| May 07,2007

U.S. sales at most major automakers fell in April, hurt by rising gasoline prices and fewer selling days than the year-earlier period.

Ford Motor (Charts, Fortune 500) saw the biggest decline, falling 13 percent, while General Motors (Charts, Fortune 500) sales were off nearly 10 percent.

Consumer Reports puts more than 75 cars to the test annually to find out which ones stand up to Americans' hard driving habits.

While DaimlerChrysler (Charts) bucked the trend of weaker industrywide sales to post a narrow sales gain in the period, the weakness extended all the way through to Asian automakers Toyota Motor (Charts), Honda Motor (Charts), Nissan (Charts), Hyundai and Kia, all of which posted year-over-year decline in sales.

Ford reported that its U.S. sales came to 228,623 vehicles in the month, down from 262,722 in the year-earlier period.

Rising gasoline prices bit into the demand for the pickups and SUVs, hitting the sales of light truck models by 6 percent, while the sale of cars dropped 24 percent. Most of that fall was due to the discontinuation of the Taurus; sales of car models fell a far more modest 8 percent excluding that model.

Sales of Ford's F Series pickup truck, the nation's best selling vehicle, sank 12 percent. That vehicle, popular with contractors, has also been hurt by the downturn in housing and home building.

Ford has deliberately cut back on less profitable sales to fleet customers, particularly rental car companies. But most of the latest decline was due to a drop in sales to retail customers. George Pipas, Ford's manager of sales analysis, said that the company's fleet sales fell just 5 percent, while retail sales tumbled 17 percent.

Pipas had warned in comments Friday that sales would be "terrible" in April, falling short of the company's own targets. But auto sales tracker had forecast a 22 percent drop in Ford sales in April, so the final sales number wasn't as bad as some had feared.

GM saw sales of cars and light trucks drop 9.5 percent to 307,554 vehicles, although the automaker said that two fewer selling days put its daily selling rate off only 1.9 percent.

The No. 1 U.S. automaker saw its total retail sales fall about 4 percent, but posted a narrow increase on a daily sales rate basis. It also made a large cut in sales to rental car companies, trimming those sales by 23,178 vehicles, which accounted for most of its drop in sales last month.

GM also beat's forecast of an overall 11.4 sales decline in the month.

Toyota's total U.S. sales fell 4.3 percent to 210,457 vehicles. It was the first year-over-year decline for the Japanese automaker in terms of U.S. sales since May 2005, when it saw a far more narrow drop in overall sales.

Toyota has been gaining market share away from the traditional Big Three automakers. The decline dropped it back to No. 4 in U.S. sales behind DaimlerChrysler for the month.

DaimlerChrysler, which is looking to sell its North American Chrysler Group unit, saw a 2 percent gain at Chrysler and a 2 percent slide in sales at its luxury Mercedes Benz brand, leaving it with a 1 percent gain in overall sales.

Jesse Toprak, senior analyst for said that he believes much of Chrysler's surprising sales strength likely came from it picking up some of the sales of vehicles to rental car companies that GM and Ford gave up. He said that its tracking of retail sales didn't show the strength reflected in DaimlerChrysler's numbers.

"It's a weak month for sure for the industry," Toprak said. "I think there's going to be a general weakness in retail sales going forward from here, although May is traditionally one of the better months."

The drop in sales at Toyota were modest compared to the sales slides for Honda, which saw sales fall 9 percent, and Nissan, where sales were 18 percent below year-earlier levels. Hyundai and Kia, the two Korean automakers, posted declines of 5 and 7 percent, respectively.

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