DETROIT, Michigan (AFP) — Automotive trends traditionally don't change nearly as fast as fashions in clothing or music.
But as sales of new vehicles in April dropped to their lowest level since the 1992, raw numbers also indicated US consumers were -- at warp speed -- foregoing beloved trucks and sport utility vehicles (SUVs) for mid-sized and compact cars and hybrids with better fuel economy.
"Smaller vehicles are going over big," said Toyota Motor Sales president Jim Lentz. "With oil prices at record levels, compact cars and hybrids continue to lead the way," Lentz said.
Japanese brands, such as Honda, Nissan Subaru and Suzuki, also reported sales increase last month as consumers opted for small cars.
Overall, Autodata reported that despite a weak economy, sales of passenger cars increased by five percent last month while sales of trucks and sport utility vehicle plunged by 17.4 percent.
So far this year, sales of passenger cars, primarily compact and mid-sized models are off only one percent on weaker industry sales, while sales of light-duty truck and SUVs have dropped 13.5 percent in the face of rising fuel prices.
Carmakers also report that more consumers are also opting for smaller, more fuel-efficient four-cylinder engines when purchasing popular new cars such as the Chevrolet Malibu, GM officials said.
"Consumer preference is shifting and we're shifting with it," said Mark LaNeve, vice president, GM North America Vehicle Sales, Service and Marketing. "Throughout the industry, truck sales have been soft," noted LaNeve after GM reported a 3.3-billion-dollar first-quarter loss as its truck sales plunged.
GM announced deep cuts in truck production through the summer even though inventories have already been thinned by a two-month strike at a key supplier.
Jim Farley, Ford Motor Co. vice president of marketing and sales, also said that sales of vehicles such as the Ford Focus and Mercury Milan were helping the company transform its sales profile away from truck and sport utility vehicles. Overall Ford's sales were down 9.8 percent, according to Autodata. However, 63 percent of the vehicles Ford sold in April were cars or car-like crossover vehicles while less than 38 percent were trucks or SUVs, the smallest percentage in more than a decade, Farley said. In fact, Focus sales were the best in any April since 2000.
Sales of the hybrid version of the Ford Escape and Mercury Mariner have also increased, leaving the vehicles in relatively short supply, Farley said. Ford also plans to cut truck production in the next quarter, while boosting production of passenger cars.
George Pipas, Ford sales analysts, said the company's dealers also are reporting that consumers who bought F-150 pickup trucks as a fashion statement in the middle of the decade are now opting to purchase cars.
"People who didn't need the utility of pickup truck are trading them in," Pipas said.
Even Toyota and Nissan, which mounted elaborate plans to grab a portion of the US pickup truck market, have opted to change plans. Bob Carter, Toyota vice president, said the Japanese giant's brand new pickup truck plant in San Antonio, Texas may not reach full-capacity now until 2009 or 2010.
Sales of the heavily-advertised Toyota Tundra pick up slid more than 13 percent last month and pickup truck sales won't improve until the housing market begins to recover, Carter said.
Nissan, which has also seen sales of pickup truck sales reduce sharply, also has announced plans to build a new line of commercial vehicles at its plant pickup truck plant in Canton, Mississippi to help fill up the assembly line.
Meanwhile, Ford's transformation away from truck to cars, while far from complete, also caught the eye of Kirk Kerkorian, the Los Angeles mogul and casino owner who has been placing bets on some successful some not, on Detroit's carmakers since the early 1990s. Convinced Ford is on the verge of major turnaround after it reported a 100-million-dollar profit in the first quarter, Kerkorian disclosed he had purchased 100 million shares or 5.7 percent of Ford's common stock as an investment in anticipation of future gains.
Chrysler LLC, another Detroit company dependent on truck and SUVs, reported a 17.6-percent decline in sales during April. An increase in sales of compact cars failed to offset the decline of the company's truck and SUV business, Chrysler officials acknowledged. Steve Landry, however, noted that the sales of fuel-efficient vehicles such as Jeep Grand Cherokee equipped with a diesel engine have been stymied by the big jump in the price of diesel fuel.
"It's clear that gas prices are weighing heavily on car-buyers' minds," observed Jesse Toprak, Executive Director of Industry Analysis for Edmunds.com in Santa Monica, California.
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