US April auto sales seen down to 18-month low

Detroit, May 1: US auto sales are expected to have dropped to an 18-month low in April, with an anemic housing market and higher gas prices sapping demand, analysts said.

''April is shaping up as a particularly weak month for automotive sales in the (United States,)'' Lehman Brothers analyst Brian Johnson wrote in a research note.

''Lower consumer confidence, associated in part with the slowdown in the housing market, appears to be taking its toll on light vehicle sales,'' he said.

Automakers will release monthly sales data on Tuesday, and results are expected to point to a weaker-than-expected start to the second quarter after first-quarter sales slid 1.2 percent.

Sales for the U.S. automakers -- General Motors Corp, Ford Motor Co. and DaimlerChrysler AG's Chrysler Group -- likely fell between 6 percent and 7 percent on a combined basis, according to analysts.

Ford is expected to have suffered the most, with sales seen down in double digits in percentage terms, even after adjusting for two fewer selling days in April this year.

U.S. vehicle sales are expected to come in at a seasonally adjusted annual rate just shy of 15.8 million vehicles for April, down from last April's rate of 16.6 million vehicles.

Goldman Sachs analyst Robert Barry said he expected April to be the weakest sales month since October 2005, with U.S.

automakers hit by ''lower fleet sales, a poor product cadence at Ford and very difficult car comparisons for Chrysler.'' Sales in October of that year dropped to a seasonally adjusted, annualized rate of just 14.2 million units, down 13 percent from the year earlier.

Barry expects Chrysler car sales, which rose sharply in April last year, to drop of 15 percent. Chrysler's overall sales, including trucks, are on track to decline almost 6 percent, he said.

GM, which lost the mantle as the world's largest automaker to Japanese rival Toyota Motor Corp. in the first quarter, is expected to post monthly sales that are down between 3 percent and 7 percent for April.

GM attempted to boost month-end sales with a limited time offer of lower-interest financing to customers with weaker credit ratings during the last weekend of April.

GM, FORD CAUTIOUS ON APRIL RESULTS Ford's chief sales analyst George Pipas said on Friday that industrywide sales in April had been ''terrible.'' GM's product chief, Bob Lutz, said earlier this month that the crisis in the U.S. mortgage market had hurt U.S. auto sales in April.

Weak housing starts have also hurt sales of high-margin pickup trucks, which are typically bought by contractors.

Mike Jackson, chief executive of AutoNation Inc.,, the largest U.S. auto dealership chain, said last week that higher interest rates on home mortgages would hurt U.S. vehicle sales for the rest of the year as consumers avoid big-ticket items.

The Detroit-based automakers, which combined lost more than billion in 2006, have been steadily losing sales and market share to Asian rivals in the U.S. market.

All three automakers are cutting back on low-margin fleet sales -- typically sold to daily rental companies and government agencies -- in an attempt to shore up the resale value of their vehicles.

Even Toyota, which has routinely trounced its rivals in recent months, is expected to see slower growth in April.

''We expect Toyota to post only very modest sales growth for the month,'' said Lehman's Johnson, who forecast a 2 percent sales gain.

''Sales of passenger cars seem to be slightly down (year-over-year), with Scion products down sharply ahead of the launch of redesigned models later this year,'' he said.

Sales for Honda Motor Co. Ltd. are expected to be down 1 percent to 3 percent.

Nissan Motor Co., which was outpaced by both Toyota and Honda in the first quarter, could emerge as the fastest growing of the major six automakers in April, with an estimated sales gain of 3 percent to 5 percent, according to analyst forecasts.

Reuters>