US auto sales in April up by 20pct YoY

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Reuters reported that US auto sales rose by about 20% YoY in April 2010 from recession stunted results a year earlier, reflecting a still gradual recovery in the economy. However, the figures were not as robust as some had hoped, particularly given incentives and a slew of economic data that suggest an economy on the mend after the deepest downturn since the depression of the 1930s.

Mr Steve Carlisle vice president of GM US sales said that "Overall, the US economic recovery would appear to be on track, however the pace isn't expected to be as robust as compared to other post war recoveries kind of a slow and steady sort of scenario."

Toyota Motor Corporation sales rose more than 24%, a weaker than expected result, and the automaker extended record company incentives for a third consecutive month to jump start sales that had tumbled earlier in the year due to massive safety recalls.

Nissan Motor Co Limited posted the largest percentage gain at 35%, followed by Hyundai Motor Co at 30% and Ford Motor Co and Chrysler at 25%.

US auto sales slipped by about 8% in April from March, about what industry executives had expected with a slight pullback on incentives overall, but all the largest automakers posted sales increases over a year earlier.

General Motors Co posted a 6.4% sales increase from a year earlier, but held its position as the No 1 seller in the United States by a wide margin in April over Ford. Toyota was third.

Excluding its discontinuing brands, GM sales rose 20% in April from a year earlier when the auto industry was bracing for bankruptcies by GM and Chrysler. Chrysler filed for bankruptcy at the end of April 2009 and is now under management control of Italy's Fiat SpA. GM followed with a government funded bankruptcy a month later.

Ford, whose shares ended 2.2% higher at USD 13.3 on the New York Stock Exchange on Monday, said that F Series pickup truck sales rose 42% and Escape SUV sales rose 41%.

Honda Motor Co Limited, No. 4 in the United States by vehicles sold and the most closely shopped brand to Toyota, reported a 12.5% sales increase as its incentives trailed Toyota's by some USD 700 per vehicle, according to Edmunds. Hyundai set a sales record for the month of April and when combined with its smaller affiliate Kia Motors took No 6 in US sales from Nissan.

The US results follow a sharp jump in April sales in Spain that was supported by government incentives to scrap older vehicles, and a slight 1.9% car sales increase in France where such incentives were pared.

Automakers pulled back about 5%t on discounts in April from March overall. Toyota trimmed incentives 9% from the prior month, but April discounts were still up 50% from a year earlier.

The industry in 2010 is expected to snap a four year drop in US auto sales that reached 10.4 million vehicles in 2009, the lowest total since the early 1980s even without adjusting for population increases.

The first four months of 2010 have seen US industry sales just below Ford's 2010 forecast range of 11.5 million to 12.5 million vehicles including medium and heavy trucks and a gradual increase in the pace of sales is expected.

US auto sales were nearly 17 million vehicles in 2005 and industry experts believe a rebound to the 16 million vehicle range last reached in 2007 could take several years.