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The posting of April sales is a continued indicator that United States auto makers are experiencing a recovery since the bailout. Ford Motor Co. enjoyed approximately a 25% increase in sales from April of 2010. GM sales were up approximately 6.4% and they posted a first quarter profit of over $3.2B. Though Toyota Motor Company has grappled with safety recalls, they posted 24% increased sales. Several other companies are seeing the same significant gains holding over from prior months.
Much of this success is attributed to the shifting domestic buyer’s taste in automobiles. The industry heard consumers clearly when they began clamoring for small, fuel-efficient vehicles. As such, several are in production and continue to be produced while medium to larger-scale automobiles are being discontinued.
Incentives from manufacturers were a major catalyst in helping to improve sales across the board. As sales have risen, manufacturers have begun dialing back quite a few of their incentive programs to try and push sales to a more normalized fashion. Sales are decreasing steadily from March when many of these incentive programs were at their peak to bring in wary customers.
Studies conducted by auto industry researching website Edmunds.com showed a reduction of nearly 5% in incentives as automakers tried to rein in their spending. Many good bargains are still available though incentives are changing. GM posted an approximate expense of $3,270 per vehicle on incentives. Though this number is quite high, the average was skewed by incentives offered on discontinued models to simply get them moved and on the road. Honda Motor Co. spent approximately $1,790, setting a new record high in incentives offered on Honda automobiles.
Increase in sales is good news for the industrial sector who is currently witnessing a void of qualified workers in quite a few markets. Manufacturers are gearing up for production of new designs, moving into roomier office buildings, and making regular payments on the government bailout they received that rescued them from bankruptcy.
Though analysts feel that it is too early to say where the recovery will ultimately lead manufacturers, it is clear that the Big Three of Detroit and other manufacturers were not ready to surrender to foreign competitors. Their coming fight will be to reclaim lost market share and get consumers back in more of their vehicles.
