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[greenyes] SUV Sales Hit by Gas Prices



May 4, 2005
Ford and G.M. Suffer as Buyers Shun S.U.V.'s

ETROIT, May 3 - The latest automobile sales figures show that Americans are
increasingly wary of gas-thirsty sport utility vehicles. That was
particularly bad news for General Motors and the Ford Motor Company, which
both saw their sales slip last month as consumers continued their steady
march into Asian car companies' dealerships.

Both Toyota and Nissan posted record sales gains in April, which helped push
overall auto sales in North America up 1.8 percent.

But even as sales were expanding for the industry, they were shrinking at
G.M. and Ford. The decline was the sharpest at General Motors, the world's
largest automaker. G.M.'s sales fell 7.7 percent from the same month a year
earlier, primarily because of a weak demand for S.U.V.'s. The lack of
appetite for S.U.V.'s also hurt Ford, which sold 5 percent fewer vehicles in
April compared with a year ago.

April's sales numbers showed no signs that the pressure on Detroit from its
Asian rivals will let up anytime soon. That became particularly evident on
Tuesday as Toyota reported that April had been the most successful month in
its history. Its sales were up 21.3 percent on big gains in the number of
passenger cars sold.

Nissan also passed a sales milestone last month and reported its strongest
April on record. Sales increased 27 percent for the Japanese automaker,
compared with the same month last year.

"The strength that G.M. and Ford have had has been in traditional S.U.V.'s,"
said Ron Pinelli, president of the Autodata Corporation. "Now that there's
new product out there, consumers are defecting" from G.M. and Ford to
companies offering the newer vehicles.

Ward's AutoInfoBank projected that vehicle sales in North America would
reach a seasonally adjusted rate of 17.4 million units this year if sales
continued at April's pace, which would be a solid performance for the
industry. April's results further suggested that the industry was bouncing
back from a slow start at the beginning of the year. Auto sales lagged in
January and February but perked up slightly in March. The 1.8 percent
improvement over last April is more than double the increase the industry
saw from March 2004 to March 2005.

With sales down at G.M. and Ford, the two companies offered very different
explanations of the impact high gas prices were having on business. This
year, sales of S.U.V.'s have declined not only at G.M. and Ford but at
Toyota as well, leading many inside and outside the auto industry to
conclude that consumers were staying away from S.U.V.'s in favor of more
fuel-efficient cars.

General Motors has long maintained that gas prices do not affect how
consumers approach buying a car or truck. But on Tuesday, G.M.'s chief
industry sales analyst, Paul Ballew, appeared to retreat somewhat from that
position, saying that record gas prices were likely playing some role in
falling S.U.V. sales.

"It's probably impacting a bit on the margin," Mr. Ballew said. Pointing to
G.M.'s improved large truck sales, he added a caveat: "People want to
quickly say large utility sales are down because of gas prices, and that is
just not the cause-and-effect relationship that we can find."

By contrast, Ford's top sales analyst, George Pipas, said Tuesday that
record gas prices were directly responsible for a sharp decline in the
number of S.U.V.'s that Ford sold in April.






Peter Anderson, President
4513 Vernon Blvd. Suite 15
Madison, WI 53705-4964
Ph: (608) 231-1100
Fax: (608) 233-0011
Cell: (608) 698-1314
eMail: anderson@no.address

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