Auto Sales Dip Due to a Slowing Economy

April’s auto sales numbers have just been posted and almost every major automaker had a sales decrease last month. Even the Asian automakers that have been making headlines for their sales gains, took a hit.

The U.S. economy is on a decline due to a decline in the housing market and the rising fuel prices. This has lowered consumer confidence and automakers are seeing the effects in their showrooms. Last month’s sales declined 7.6% or 110,000 vehicles compared to last April. If fleet sales had been factored in, retail sales would have looked even worse.

The only major automaker to post an increase last month was Chrysler, although the increase is not as good as it seems. Chrysler increased their incentives last month on many of their vehicles in order to keep them moving off the lots.

Although sales have decreased, many automakers have not increased their incentives. Compared to this time last year the average number of incentives have decreased, which may also be one of the causes for the slipping sales. Automakers may eventually be forced to raise their incentives, although so far for this month it hasn’t happened.

Toyota, which is consistently in the news for their sales gains, even took a hit last month. The automaker had a year-over-year decline of 4.3 percent. Honda also had a decline of 9.1 percent.

With this dismal news, it seems that it will be a while before sales pick up. Sales in March remained flat and if this trend continues, we can expect a decline this month as well. Since consumer confidence in the market as a whole is down, it is going to take more than incentives to move the vehicles, even though they will help.

Full Story: Detroit Free Press

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