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April Anxiety For US Auto Sales
May 09, 2007

April proved to be a highly depressing month for automobile manufacturers in the US as sales continued to decline. Only one of four of the leading car making companies in the country reported an increase in sales.

The uneasiness over the dismal housing market led to a drastic fall in US auto sales with American consumers avoiding showrooms as per the initial sales results from leading automakers on May 1, 2007. The first monthly results report to emerge was from Ford Motor Co. which registered a six percent decline in April following a warning of industry-wide sales taking an unexpected fall in the month as reported by TimesofMalta news.

A drop of 9.5% in April was posted by General Motors Corp. (GM) in April for US light vehicle sales with a scale-back of less profitable sales to rental car fleets. April sales of cars and light trucks in the US by Ford Motor Co. (F) experienced a 13% fall, hampering turnaround efforts of the company. However the same month saw Chrysler Group with a rise of 1.6% in US sales, for 24 selling days in contrast to 26 in previous year.

The poor sales results in April, that were preceded by flat sales in March, prompted concerns among industry insiders about automakers being compelled to lure shoppers to showrooms using blowout national incentives or to resist the temptation despite suffering falling sales.

Declining car sales in the country is a continuing trend with buyers spurning larger vehicles to shift focus to smaller and more fuel-efficient cars. Also contributing factor to the decline of sales for this month is the recent escalation of gasoline prices. In the last two years alone, American motorists have endured gasoline prices shoot skywards making them more than hesitant to buy another car.

Auto industry experts also highlight an additional factor with the increase in adjustable rate mortgages that has led to consumers becoming even more reluctant about buying a new car.

In the opinion of a research analyst at
RNCOS, the recent months have witnessed extreme volatility in the sales of motor vehicles in the US with periods of offsetting declines and gains. This has partly been the result of dealer promotions and the introduction of new models for 2007.

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