April Car Sales Continue Weak

Highlights include Ford Motor Co. (F - Analyst Report), General Motors Corp. (GM), Honda Motor Co., Ltd. (HMC - Analyst Report), Nissan Motor Co., Ltd. (NSANY - Analyst Report) and Toyota Motor Corp. (TM - Snapshot Report).

Auto sales were very weak in April, but this is a continuation of an ongoing trend. Overall, sales are down 34% in April.

Ford (F - Analyst Report) sales were off 33%, mainly due to a weak F-series sales. General Motors (GM) sales were down 33%, with weakness in the SUV part of the product line. Chevrolet was down 27%. Chrysler sales were down 48%, even with average incentives of $4,300 (compared to an industry average of $3,000), which is 20% of the price of a car.

Honda (HMC - Analyst Report) sales were off 25%, which still are the best of the “Big-4” automakers (Honda sources more of its content from the USA than even Chrysler). Nissan (NSANY - Analyst Report) sales were down 38%. Toyota (TM - Snapshot Report) sales were off 42%. We suspect sales were weak in the SUV part of the product line. Hyundai continued to buck the trend and had sales down only 14%, which implies that their “return your car if you lose your job” program is having success, but is starting to be copied by others.

Summary: Get out there and buy a new car. High inventories and slow sales are the perfect backdrop to start “working the car lots.” We recommend going to Honda and Chevy dealers to start, as they have the best overall product in the market according to many metrics we monitored at the San Diego Auto Show.