April Auto Sales Expected To Show Decrease
April 26, 2007
As the month of April approaches its final days, monthly sales for the month are expected to be posted by car manufacturers. But before the selling days for the month are over, analysts in the auto industry have already predicted that the U.S. auto sales figures for this month will show a reduction as compared to the same month last year.
Experts infer that slow sales for this month will hurt the U.S. Big Three more than it will affect Japanese car brands such as Honda and Toyota. This will surely increase the chances of the Toyota Motor Corporation overtaking the Ford Motor Company in terms of U.S. auto market share. The expected lowers sales for General Motors will also boost Toyota's bid to become the world’s largest car manufacturer.
The reason cited by industry analysts for declining sales is the continuing trend which sees car buyers turning their back on larger vehicles and focuses more on smaller and more fuel efficient vehicles. It is a known fact that the U.S.’ Big Three are manufacturing large vehicles such as pickups and SUVs. This focus on large vehicles is seen by the car industry experts as Detroit’s downfall.
Recently, Toyota announced their sales figure for the first quarter of the year. as compared to General Motors’ sales output for the same period, Toyota surpassed the current largest car manufacturer in the world. And if the predicted slow sales for larger vehicles prove to be true, Toyota will be one step closer to dethroning General Motors by the end of the year.
Aside from loosing further ground against their Japanese competitors, Ford, General Motors, and Chrysler will also have difficulty setting in motion their restructuring plan. For years now, the three biggest U.S. auto brands are lagging behind Toyota in terms of profitability. Last year alone, Ford recorded their worst year in the company’s lengthy history. Just like Ford, General Motors and Chrysler also suffered from declining sales. In fact, due to its declining sales, the Chrysler Group is now in the auction block as its parent, DaimlerChrysler AG, chose to detach itself from the struggling brand.
Chrysler’s woes have resulted in slashing down jobs at their assembly plants. The company has also announced that they will be shutting down a plant and will reduce the number of shifts in another. Joe Barker, the senior manager of global sales analysis for CSM Worldwide, said that: “It's a very tough environment out there right now. 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.” CSM Worldwide is an auto forecasting company.
The recent spike in the prices of gasoline is also seen as a cause of declining sales for this month. For the past couple of years, American motorists have experienced skyrocketing prices of gasoline and this has made car buyers wary about buying another car. In fact, in recent surveys in the United States, it has been found out that the most looked after attribute in a car by prospective car buyers is its fuel economy. This focus on fuel efficiency made gas-electric hybrid vehicles such as the Toyota Prius and the Honda Civic Hybrid popular among car buyers.
Aside from the price of gasoline, experts in the auto industry also pointed out that the increasing adjustable rate mortgages has made consumers think twice about purchasing a new car. But with the increasing production of fuel efficient cars which can be equipped with brake components from Active brakes direct, Toyota and Honda are expected to continue their strong sales output in the coming months and years.
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