Sales tally may show small cars in front

June 03, 2008|By Brent Snavely | Brent Snavely,Detroit Free Press

DETROIT - When automakers report monthly sales results today, the numbers are likely to show more evidence of a fundamental purchasing shift among U.S. consumers who are abandoning profit-generating pickups, SUVs and luxury vehicles in favor of fuel-efficient cars, including gas-electric hybrids.

Sales are believed to have declined in May - led by General Motors Corp. and Chrysler LLC - along the way to the worst auto sales year in more than a decade.

But even more important for the U.S. auto industry is the sea change in buying patterns.

During the first four months of this year, sales of pickups dropped 16.8 percent, SUVs dropped 9.9 percent and luxury vehicles fell 12.9 percent, according to Autodata Corp., while sales of small cars rose 7.5 percent.

"Part of the story is the absolute volume drop," said Michael Robinet, vice president of global vehicle sales forecasting at CSM Worldwide in Northville, Mich. "But I think the bigger story that especially affects Detroit is the segment change that is going on, and how the Detroit Three are going to react."

Automotive Web site Edmunds .com said last week that it expects May sales to be 7.4 percent lower than for the corresponding period in 2007. It predicted that GM will report a 19.2 percent sales decline, followed by Chrysler with an 18.2 percent sales decline and Ford a 9.3 percent decline.

"As a result of high gas prices, compact car and hybrid market share are predicted to reach an all-time high this month," Jesse Toprak, executive director of industry analysis for Edmunds.com, said.

For the first four months of the year, hybrid sales in the United States rose 20 percent to 123,230 vehicles, or 2.7 percent of the total sales, according to Edmunds.com.

Many consumers who need a vehicle are instead buying used cars and - to a lesser extent - trucks.

Prices of used full-size SUVs fell 17.5 percent and full-size pickups fell 15.8 percent, according to an equity research report from Lehman Bros, while prices of used compacts rose 10.2 percent.

The segment shift also is hammering luxury sales. Through April, sales of luxury imports fell 11 percent and sales of luxury domestic vehicles fell 17.8 percent, according to Autodata.

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