Analysts Say U.S. Auto Sales Likely Rose in April As Consumers Take Advantage of Cash Rebates

DETROIT April 30, 2004; John Porretto writing for the AP reported that U.S. sales of new cars and trucks likely rose 3 percent to 5 percent in April as consumers continued to take advantage of cash rebates and financing deals and some spent tax refunds, analysts predicted.

Major automakers report April sales results Monday.

"Tapped-out Americans probably bought more cars and trucks than were good for them during the last recession, and it's taking some extraordinary price cuts to lure them into buying still more in 2004," said David Healy, an analyst with Burnham Securities Inc. "Fortunately for Detroit, consumers 'trading up,' along with the companies' aggressive cost cutting, is rebuilding the bottom line."

Healy predicts April sales to rise about 5 percent from "so-so" year-ago levels.

Merrill Lynch analyst John Casesa expects sales to increase about 4 percent for a seasonally adjusted annual sales rate of 16.9 million, up from the seasonally adjusted rate of 16.7 million last month and 16.4 million last April.

The sales rate indicates what sales for the full year would be if they remained at the same pace for all 12 months. Full-year sales for 2003 were 16.7 million.

Casesa said GM will likely be the sales winner among Detroit automakers because of hefty incentives offered on most 2004 trucks through June 1. The deals are designed to help GM reduce light truck inventories after a relatively slow start to the year.

Healy said Ford Motor Co. and DaimlerChrysler AG's Chrysler Group largely failed to match GM's aggressive recent deals and their sales are likely to suffer as a result.

Chris Ceraso, an analyst with Credit Suisse First Boston, predicts foreign automakers continued to grow their U.S. market share in April, led by Japanese companies.

Ceraso said Nissan's new Titan full-size pickup and Armada sport utility vehicle could have lifted Nissan's sales by as much as 20 percent from a year ago. He said Toyota's sales growth will likely be in the same range, driven by light trucks in general and the Sienna minivan in particular.