U.S. auto industry sales have dropped far below expectations for April, a Ford Motor executive said on Friday, as rival General Motors rolled out an incentive program intended to boost crucial month-end sales.
"This month is terrible," Ford chief sales analyst George Pipas said in an interview. "We are not even close to where we expected to be in April."
Pipas said industry volume appeared to be down 10% to date before seasonal adjustment, but he expected Ford's U.S. retail share to hold steady at around 13%.
Pipas said the spillover from weaker housing to other areas of the economy and rising gas prices appear to be affecting consumers but added that many of these same factors were also present in March.
"I have a hard time explaining why April is so weak," he said.
Ford and other automakers will report April U.S. sales on May 1.
For the first three months of the year, U.S. industry-wide auto sales were down 1.2%.
Tough Month of April?
Earlier this week, General Motors Vice Chairman Bob Lutz said the crisis in the U.S. mortgage market has hurt U.S. auto sales this month.
Lutz said he did not know how GM's sales performed in April, but he expected the whole automotive sector would feel the impact of the stress on the mortgage market.
GM is offering lower-interest financing to customers with weaker credit ratings through this weekend in an effort to boost sales for April, sources familiar with the sales plan said on Friday.
GM will offer reduced interest rates to customers whose credit is assessed at two of its lower rating levels on all brands except Saab, the sources said.
Detroit automakers had forecast a flat to slightly weaker vehicle market going into 2007 before the pressure intensified on subprime lenders, who have poor credit histories.
Pipas's comments followed cautionary remarks from auto dealers on the expected impact from the slowing housing market.
Weak housing starts have also weighed on sales of high-margin pickup trucks, often bought by construction workers.
Ford is in the middle of a sweeping restructuring that involves closing 16 plants and cutting about 45,000 jobs. The cautious comments from Ford follow a better-than-expected first-quarter financial results from the automaker.
Ford's U.S. sales were down 13% in the first quarter and GM's sales were down 5.5%, while Toyota sales rose 11%.