Auto sales slowed in April because of the continuing decline in demand for compact cars and sedans are setting a dark tone as car makers head into the summer selling season. Car sales decreased more than 5% this month compared with the same period last year, analysts think this is partially because there were two fewer selling days this month.
Oil prices going up and credit conditions getting tougher create concerns for car maker’s executives. Pickup trucks and sport-utility vehicles continue to perform well amid relatively low fuel prices. But gasoline is continuing to grow in price, expected to surpass $3 a gallon through the summer driving season. But, higher prices for fuel aren’t leading consumers to more efficient cars. Sales of SUVs and pickup trucks are estimated to account for 76% of new-car sales in April. Auto-makers realizing the switch in consumer preferences are starting to back away from sedans.
Car manufacturers spent about $3,700 per car in discounts and other stimulations in April. This is 5% more than last year. However, the deals were heavily directed toward SUVs and crossovers, while incentives on car models declined.