Edmunds.com Forecasts Weak April Sales
April 30, 2007

Automakers announce April vehicle sales tomorrow (May 1), and it isn’t expected to be a particularly pretty picture for the industry. In fact, it could wind up being one of the weakest Aprils in recent history for total industry sales.

Edmunds.com is forecast April new vehicle sales (including fleet sales) are expected to be 1.29 million units, a 10.4 percent decrease from April 2006. The reasons for the decline are many: less selling days in this April than last; reduced fleet and rental car sales; and a lack of consumer confidence that suggests little pent-up demand for vehicle purchases exists.

The numbers will also show some shifting trends in the auto industry -– most notably from minivans to crossovers.

"This month, due to two less selling days, a decrease in production along with reduced fleet and rental sales by domestic manufacturers, we will have one of the weakest April’s in recent history for total industry sales," said Jesse Toprak, executive director of Industry Analysis for Edmunds.com.

Consumer Confidence Shaky

Also in April, U.S. consumer sentiment fell to a seven-month low. The Reuters/University of Michigan Surveys of Consumers said the final April reading of its consumer sentiment index slipped to 87.1 from 88.4 in March. It was the third straight monthly fall in the index.

The survey showed increased inflation expectations among consumers, who also fretted over rising gasoline prices and troubles in the housing market.

However, the stock market's recent performance cheered some. In fact, the rising stock market is credited with the consumer confidence index finishing the month than it had first been estimated in early April and pushing it above forecasts, Reuters reported.

Other analysts surveyed by the Associated Press, who also predict soft April sales, note consumers also have a tremendous amount of debt, are faced with increased payments due to rising adjustable rate mortgage and/or are waiting to see what happens to gasoline prices.

The average price of a gallon of regular gasoline at the pump rose to $2.60 on April 26, the highest since August, according to figures from the American Automobile Association.

"Surprisingly, even with high gas prices, large SUVs were the only category to post a significant gain, up nearly 18 percent because of high incentive spending,” said Edmunds’ Toprak. “Minivans were hit the hardest, down 25 percent, because of the rise in crossover SUVs and the lack of product from GM and Ford."

Domestic Turnaround Plans Challenged

Indeed, it is the domestics who suffered most in April’s soft sales. The domestics, all in the midst of turnaround plans but at varying phases of their plans, are continuing to see negative sales numbers with Ford being hit the hardest.

Those turnaround plans will be more difficult to accomplish, analysts note. “If you’re undergoing a restructuring at the same time that you’re trying to go after a smaller pool of consumers, it just adds to the complexity of a turnaround plan,” Joe Barker, senior manager of global sales analysis for CSM Worldwide, a Detroit-area automotive forecasting firm, told the Associated Press.

Edmunds.com forecasts the combined monthly U.S. market share for Chrysler, Ford and General Motors (GM) domestic nameplates is estimated to be 52.2 percent in April 2007, down from 54.6 percent in April 2006 and down slightly from 52.7 percent from March 2007.

Edmunds.com predicts Chrysler will sell 171,000 units in April 2007, down 9.8 percent compared to April 2006. This would result in a new car market share of 13.3 percent for Chrysler in April 2007, up slightly from 13.2 percent in April 2006 and down from 13.5 percent in March 2007.

Edmunds.com predicts Ford will sell 202,000 units in April 2007, down 21.7 percent compared to April 2006. This would result in a market share of 15.6 percent of new car sales in April 2007 for Ford, down from 17.9 percent in April 2006 and down from 16.7 percent in March 2007.

Edmunds.com predicts GM will sell 302,000 units in April 2007, down 11.4 percent compared to April 2006. GM's market share is expected to be 23.3 percent of new vehicle sales in April 2007, down slightly from 23.6 percent in April 2006 and up from 22.6 percent in March 2007.

Ford Exec: A "Terrible" Month

"This month is terrible," Ford chief sales analyst George Pipas said in describing the unexpectedly weak industry-wide performance. "We are not even close to where we expected to be in April."

Pipas said the spillover from weaker housing to other areas of the economy and rising gas prices appear to be affecting consumers but added that many of these same factors were also present in March.

"I have a hard time explaining why April is so weak," he said.

Chrysler Announces Sales/Marketing Changes

Perhaps Chrysler saw the soft sales of April coming and, last Friday, made some management changes in its sales and marketing organization. Steven J. Landry was promoted to executive vice president –- NAFTA sales, global marketing, service and parts, and Michael Manley was promoted to executive vice president –- international sales, marketing and business Development. Both report directly to Chrysler CEO Tom LaSorda, who had taken responsibility for sales and marketing himself in December.

In addition, Darryl R. Jackson was promoted to vice president -– U.S. sales; Michael J. Keegan was promoted to vice president – volume planning and sales operations; and Thomas Hausch was be promoted to vice president – international sales. Other posts were realigned in the marketing ranks.

“This team has been given clear marching orders,” said LaSorda. “Continue to build the equity of our three great brands –- Chrysler, Dodge and Jeep; work with our dealer body in all markets to continuously refine and enhance the customer experience, while increasing dealer throughput and profitability through optimization of the network; protect and grow our NAFTA presence; and, profitably and substantially grow our sales in international markets.

Even the Japanese Hit

Edmunds.com predicts Honda will sell 127,000 units in April 2007, down 8.9 percent from April 2006. Its market share is expected to be 9.8 percent in April 2007, up slightly from 9.6 percent in April 2006 and up from 9.4 percent in March 2007.

Edmunds.com predicts Nissan will sell 83,000 units in April 2007, down about 4.7 percent from April 2006. Nissan's market share is expected to be 6.4 percent in April 2007, up from 6.0 percent in April 2006 and down from 7.2 percent in March 2007.

Edmunds.com predicts Toyota will sell 213,000 units in April 2007, down about 3.2 percent from April 2006. Toyota's market share is expected to be 16.5 percent in April 2007, up from 15.2 percent in April 2006 and up from 15.8 percent from March 2007.

Word is Toyota, seeing how bad April was looking, dumped some fleet sales into the month so its figures wouldn't look so bad.

April by the Numbers

This April had 24 selling days, two less than April 2006. When adjusted for this difference, sales decreased 3.0 percent from April 2006. (The chart below sets forth other unadjusted and adjusted comparisons.)

	Change from April 2006 (Adjusted for more selling days)	Change from April 2006 (Unadjusted for more selling days)
Chrysler	-2.3%	-9.8%
Ford	-15.1%	-21.7%
GM	-4.1%	-11.4%
Honda	-1.4%	-8.9%
Nissan	3.2%	-4.7%
Toyota	4.9%	-3.2%
Industry Total	-3.0%	-10.4%

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