National & World News
Small, midsize SUVs drive April US auto sales gains
DETROIT (AP) -- In April of 2014, the compact Chevrolet Cruze outsold the Equinox midsize SUV by more than a thousand vehicles. A year later, the Equinox trounced the Cruze by nearly 8,000 in sales.
Those numbers pretty much sum up the shift in attitude among U.S. auto buyers: as they increasingly fall in love with SUVs, small and midsize cars are having a harder time getting a date.
SUVs and trucks powered U.S. auto sales to a 4.6 percent gain last month, with several automakers reporting their strongest April sales ever. The stylish and practical new SUVs are pulling people away from cars, forcing automakers to discount sedans and even furlough workers to control growing inventories.
A big drop in gas prices, to an average of $2.60 a gallon from $3.69 a year ago, also works in favor of SUVs.
The Equinox posted a 42 percent sales increase to almost 29,000 in April, while Cruze sales fell nearly 4 percent to just under 21,000. Both vehicles are made by General Motors.
The trend played out in other automakers' results. Ford's revamped midsize Edge SUV posted a 78 percent gain while Focus compact sales fell 5 percent. Honda's CR-V, the top-selling SUV, posted a 3 percent gain to more than 29,000, outselling the midsize Accord sedan, which saw sales drop 20 percent.
"The demand for crossover SUVs is off the charts," said Bill Fay, a group vice president at Toyota, which posted record April sales of the RAV4 and Highlander SUVs. Still, loyal followers weren't so quick to abandon Toyota's bread-and-butter vehicles. Sales of the Corolla compact grew 10 percent, and even though Camry midsize car sales fell from last April, it remained the top-selling car in America.
Erich Merkle, Ford's top sales analyst, said small SUVs accounted for almost 19 percent of industry sales last month, two percentage points higher than a year ago. Small cars lost nearly a point of market share, while midsize cars lost two percentage points. Last week, Ford said it would lay off 700 workers at the Focus plant in Michigan as it brings inventory in line.
Overall, light trucks including SUVs accounted for 54 percent of sales in April, with cars at 46 percent, according to Autodata Corp.
No one expects the trend toward SUVs to reverse anytime soon. Buyers prefer the higher seating position for easier access, and they like the cargo space. Also, technology has improved the SUVs' gas mileage, and with gas selling for less than $3 per gallon across much of the country, fuel efficiency isn't top of mind anymore.
But Mark Strand, market intelligence manager for Autotrader.com, says one group in particular still needs compacts: cash-strapped millennials ages 18 to 35. Many in the age group have just gotten their first jobs and are buying discounted compacts to keep payments low as they retire big student loans. Compact car sales rose a modest 3 percent through April.
"They might like an SUV, but when you look at the payment and see what you can get, they're still going to these small cars," he said.
Indeed, the discounts on compacts are good. Kelley Blue Book said they rose nearly 16 percent from a year ago to average $2,003 last month.
Edmunds.com Senior Analyst Jessica Caldwell predicts even bigger discounts on cars during the summer as automakers try to clear dealer lots of older models as the 2016s start to arrive.
While the pace of growth in the industry has slowed, most automakers posted decent numbers in April. Sales at GM, Ford, Fiat Chrysler and Nissan rose 5 percent to 6 percent, while Hyundai rose 2.9 percent and Toyota gained 1.8 percent. Volkswagen, which lacks strong SUVs, saw sales fall about 3 percent. Honda sales declined 1.8 percent mainly on falling Accord sales.
Overall sales prices rose as buyers used longer-term loans and lower monthly payments to buy loaded-out SUVs, pickup trucks and luxury cars. Ford said its F-Series pickups sold at an average of $42,600 for the month, a record.
The average selling price of a new vehicle rose 1 percent from a year ago to $32,189, according to the TrueCar.com auto pricing site.