U.S. auto sales have dropped far below expectations for April, a Ford Motor Co. executive said on Friday, characterizing industry-wide results as “terrible” as rival General Motors Corp. rolled out an incentive program to boost crucial month-end deals.
“This month is terrible,” Ford chief sales analyst George Pipas said in describing the unexpectedly weak industry-wide performance. “We are not even close to where we expected to be in April.”
Pipas said industry sales volume appeared to be down 10 percent to date before seasonal adjustment but said he expected Ford’s U.S. retail share to hold steady at around 13 percent.
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 are due to report April U.S. sales on May 1. For the first three months of the year, U.S. industry-wide sales were down 1.2 percent.
GM Vice Chairman Bob Lutz said earlier this month the crisis in the U.S. mortgage market had hurt U.S. auto sales in April. Lutz said he did not know how GM’s sales had performed, but said he expected the whole automotive sector would feel the impact of the stress on the mortgage market.
GM responded to the slack sales climate on Friday by 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.
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.
The comments from Pipas followed cautionary remarks from listed auto dealership groups on the expected impact from the slowing housing market.
Ford’s U.S. sales were down 13 percent in the first quarter and GM’s sales were down 5.5 percent, while Toyota sales rose 11 percent.
Separately, GM said in a filing with the U.S. Securities and Exchange Commission that its chief executive, Rick Wagoner, Lutz and Chief Financial Officer Fritz Henderson had taken voluntary cuts in their base salaries to support the automaker’s turnaround efforts.
GM said Wagoner had agreed to cut his base salary by 25 percent to $1.65 million, while Henderson and Lutz took cuts of 15 percent, bringing their base salaries to $1.32 million each.
