Strong Demand for Trucks and SUVs Driving Auto Sales

Better than expected April sales keeping industry on track for best year in a decade.

May 05, 2015

DETROIT – General Motors and Ford both reported stronger-than-expected April U.S. auto sales, as strong bust demand for trucks, crossovers and SUVs kept the industry on track to see its best year in almost a decade.

GM sales rose 6% and Ford's were up 5.4%, according to the company’s reports last Friday. Fiat Chrysler Automobiles gained 5.8%, Nissan and Toyota increased 5.7% and 1.8%, respectively. Fiat, Nissan and Toyota all missed expectations. The sales results were largely in line with estimates for the market as analysts polled by Reuters expected overall industry sales to rise 6%, according to a report by CNBC.

"Consumer and commercial customer demand for pickups and utility vehicles has been building since last fall," said Kurt McNeil, GM's U.S. vice president of sales operations in a statement last Friday.

According to Ford U.S. sales chief Mark LaNeve, increased vehicle sales has been driven by buyers with good credit scores stretching to buy more premium vehicles, rather than by consumers with high-risk credit.

Sales of higher-profit pickup trucks and SUVs have been strong this year at the expense of smaller cars, amid lower gasoline prices and easy consumer credit.
"Light truck sales have carried the auto industry to its best start in 15 years," said Bill Fay, group vice president for Toyota U.S. sale, according to CNBC.

GM's sales rose to 269,056 vehicles as truck and crossover sales rose 13% and 25%, respectively. Large SUV sales fell, due more to limited availability because of sustained high demand. Sales of GM's Cadillac Escalade large SUV, one of its most profitable vehicles, rose 144%, for example. Meanwhile, Ford-brand SUVs had their best April ever, with sales up 12.3%, seeing an increase of 8% in retail sales of the new F-Series pickup truck. The automaker is now ramping up production of the redesigned truck through the second quarter, which will allow it to meet fleet demand.

Fiat Chrysler's sales rose 6% to 189,027 vehicles, led by an increase of 20% in sales of Jeep brand vehicles. The manufacturer’s Ram brand was up 4%, with another 3% increase in pickup truck sales. While it did not hit company sales expectations, demand for Nissan’s crossovers, trucks and SUVs set an April record, up 23.7%.

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