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Ford should expect to see solid sales of its Focus comp... Ford should expect to see solid sales of its Focus compact car due to increased demand for small cars and supply issues for the Japanese automakers (Ford).
April car sales kept going strong, fueled by strong consumer demand for small cars and growing consumer confidence.

Overall industry sales were up 17% compared with a year ago, according to AutoData. General Motors had a bang-up month, with sales up 26%. It managed to win back its title of biggest car seller in the U.S., an honor Ford held in March.

The bad news, though, is that prices are going up. The earthquake and tsunami that hit Japan in March is slowly draining supply, allowing dealers to increase prices. It's a tough blow to consumers who are already coping with rising gas prices at the pump and higher food prices.

Consumer web site Edmunds.com says rebates are shrinking - they were down 10.5% in April compared with March. Compared with a year ago, rebates were worth 19.6% less.

"This is the clearest indication yet that automakers are gearing up for inventory shortages," said Jessica Caldwell, director of industry analysis for Edmunds.com. "Demand for new cars has been growing as economic recovery has strengthened, but now the industry may experience a hiccup if consumers decide to wait for the next deal to come around, which may not be until the autumn."

Japanese automakers have told their dealers that shortages of vehicles will start to be felt in June and last the rest of the year. It will especially affect Japanese automakers Toyota, Honda, Nissan, Mazda, Suzuki and Mitsubishi, though U.S. automakers may be short some vehicles as well.

Prices are already starting to rise. TrueCar.com, which tracks new car prices, says the price of a Lexus RX450 is expected to jump $1,011 by May 8, up 2% in just seven days. The Lexus IS 250 is expected to go up $750 in the same time frame. Lexus could be out of vehicles by the end of May.

Transaction prices are the highest TrueCar has ever recorded, the company says.

Automakers regularly battle one another with rebates to help sell models on which they have excessive supply. Toyota, for example, has been discounting Camry and Corolla, while Honda has kept up incentives on Accord and Civic. Nissan has been one of the most aggressive discounters the last few months. But Earl Hesterberg, CEO of Houston-based Group 1 Automotive, which operates dozens of dealerships, says the lower supply of vehicles will increase prices now, and with them profits for dealers who won't have to scrap as much to move excess inventories of cars. "We could see a 30% to 50% decline in shipments of many key Japanese brand models," said Hesterberg.

Detroit automakers, not as greatly affected as Japanese automakers by the shortage of parts, though, are likely to hike prices too, though not as much as foreign makes. This will give Ford, GM and Chrysler an even greater pricing advantage than they already have. Mike Jackson, CEO of auto retailer AutoNation said, "It will still be a competitive marketplace and consumers will still have a lot of choices."

J.P. Morgan analyst Himanshu Patel expects Ford to be the biggest beneficiary of Toyota's and Honda's supply problems. Ford is more likely to benefit from selling more Fiesta and Focus cars, as well as from getting higher prices for them than they otherwise would, said Patel.

"In May, we'll see some actual shortages due to inventory which will affect sales in the coming months," said Jess Toprak, VP of Industry Trends and Insights for TrueCar.com.

The industry average incentive spending per vehicle was approximately $2,386 in April, according to TrueCar.com, which represents a drop of four percent from March 2011 and down 11 percent from April 2010. That number is expected to decline in the next few months even more.

As gas prices climb, there is a greater demand for small cars. And those are the ones most greatly affected by the Japanese disaster. Toyota Yaris, Honda Fit and Nissan Versa are all imported from Japan, and have been directly impacted. Meantime, Ford has a new Fiesta and Focus in market, while Chevy has a new fuel efficient Chevy Cruze.

Used cars are hardly a refuge for sticker shocked buyers. According to the National Automobile Dealers Association, the transaction price on a new Toyota Prius starts at $22,400, while a two-year old model is only $1,600 less.

There is a perfect storm driving up the cost of used cars. The loss of production due to the Japanese earthquake, and the fact that so few new cars were sold two years ago at the heart of the economic meltdown. Some six million fewer vehicles were sold in 2009 than the 16 million a year the industry was selling a few years earlier.

Prices for used cars at auctions where dealers buy their cars are up around 15% to 20% from a year ago.

There is a silver lining, though, as dealers say they are paying more for consumer trade-ins than they were because of the shortage.


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    • 1 Second Ago
  • 429 Comments
      • 3 Years Ago
      why are we worried about foriegn cars honda and all the japan makers will make it through as they just plainly make better reliable cars with good MPG. this should help GM and Chrysler pay back their money to the government as they should be paying it back WITH interest just like any other American that borrows money. they are raising gas prices to 5 dollars a gallon no one is going to buy a v8 truck anymore unless ur wealthy in this recession . they want u to buy electric cars that are still in the beginning stages of design to make them reliable as they are not rite now. they dont have any ways where u could be driving around and recharge ur vehicle quickly like gasoline engines. raising gas prices or car prices is gonna help the economy out at all.
        • 3 Years Ago
        Ford is selling their newest truck wit the eco-boost ,like crazy.................... screw the jap cars.............you wanna think thye are still the best. do so............................you talk out of ignorance.........................thye are NOT better NOR more reliable..................
        kwikrdrvr
        • 3 Years Ago
        Too bad you never learned to write a sentence that made sense.
        jw4kfh
        • 3 Years Ago
        Yikes! Is this the result of public education? Please take an english comp. class prior to posting...
        Dan
        • 3 Years Ago
        YOU KEEP BUYING THOSE JAP CARS AND HELP MAKE AMERICA TO BE STRONG.
      Martin
      • 3 Years Ago
      pay me !
      Condley
      • 3 Years Ago
      I'm retired and rich, buy American standards, and I have always bought Amwerican cars to help out my American auto workers. But after the bail out of Gm and Chrysler, and when the stole my tax money and destroyed my bonds. I'm never going to buy an American made car again. The UAW can rot in a very hot place along with the President the UAW bought and paid for.
        Ono
        • 3 Years Ago
        @Condley
        Well, well, well, Condley. Guess f'n what! The UAW built the cars that management had designed, tested, and marketed. Maybe ... just maybe the auto CEO's should take their earned spot in hell, too.
        harleydavid105
        • 3 Years Ago
        @Condley
        Then don't forget what Japan destroyed. Pearl Harbor ring a bell. You'll support Japan and not your own country? Shame on you.
          Plummer, Joseph
          • 3 Years Ago
          @harleydavid105
          Japan was rebuilt by America after the war, We built them brand new factories with American know-how,while the factories here in the U.S. fell apart. same in Germany, South Korea, everywhere but here, Once worked in steel mills, talk about rusting support columns, walkways 75' above the main floor with rusted brackets and flooring, roofs that leaked, and the companies didn't maintain anything until it collapased.,
      redcapline
      • 3 Years Ago
      Good, Lets keep the imports out-Lets buy American from American Companies instead. Real Americans Buy American Made Cars and trucks from American Companies. Those who do not are slackers-Period
        bj the dj
        • 3 Years Ago
        @redcapline
        Oh really!! I thought in America we were free to live our lives as we choose. Maybe you should move to Russia. They have much less freedom there to buy what they want.
          harleydavid105
          • 3 Years Ago
          @bj the dj
          If you like Jap cars so much maybe you should move to Japan. Real Americans support their country. Especially now with the shape this country is in.
        • 3 Years Ago
        @redcapline
        hate to tell you but mu silverado truck was made in mexico not in the good old usa
      bass4mb
      • 3 Years Ago
      WITH THESE GAS PRICES, NOBODY IS NOT GOING TO BUY ANYTHING AT $30000 AND UP. YOU CAN KEEP YOUR NEW CARS... MAYBE $5.00 a gal. BY JULY 1. GOOD LUCK ON THAT NEW CAR.... LOL..............
      mapacool
      • 3 Years Ago
      If the cars and parts were made in the U.S. like they used to be there wouldn't be this problem.
      ERL
      • 3 Years Ago
      DON'T FORGET YOU MUST SLEEP & EAT ( LOL )
      therule72
      • 3 Years Ago
      It's AMAZING... car prices and gas up... millions still outta work.... the constant bitching about gas and food prices... yada, yada, yada.... YET the suckers keep on buying.. OK, lemmings, it's back in debt. Corn juice wasted on ethanol.... our bailout $$$ given to the auto crooks.... when will we learn??
      • 3 Years Ago
      Cool! Ford pick up trucks use transmissions made in Japan!!! Yeah!!! My brother in laws Chevy trucks are from Mexico and Canada!!! The GM diesel isn't that ISUZU?? Yabba Dabba do!! Oh by a Harley Duuuuude for 20 thousand and have japanese showa denka rims, carbs and exhaust and seats made in India and pistons from Japan!!! YEEEEEE HAAAAAA!
      • 3 Years Ago
      Ill Keep repairing my old one, It will run virtually forever there is nothing that cannot be repaired.. and it is much cheaper than a long high car payment , who can affor the high new car prices ? mine is 14 years old and still going, even if you spend 1000.00 dollars a year on it , it is still cheaper than high car payments, Go Figure?
        cgino
        • 3 Years Ago
        My Mercury marauder is 8 years old and paid off. I had an expensive repair bill and was initially pissed at the price. After I did the math, the repairs were cheaper than a new payment on a new smaller car. The biggest car Ford builds today is a Taurus/ Lincoln MKS. At over 600 per month, a 1000.00 dollar repair is cheap. A new car payment is 7200 per year, even if you have 3 or 4 grand in repairs, you are still ahead of the game by thousands! The sad part is, these small cars are uncomfortable on top of outragous payments and the gas mileage isn't much better than the used ones. Besides, you still have maintenance cost with a new car too! I'll keep my old car and save a heap of cash every year! I mean really, 42K-45K for a new mustang gt, are they nuts! Same goes for similar GM products!
        mobnana
        • 3 Years Ago
        And i though i was the only one that kept a car forever. I have a Chevy Blazer full size 4 x 4 with 410500 miles and I will never buy a new car. The cost of the car, insurance on a new car, taxes, excise tax, and just paying payment is crazy. Even if I had to replace all the running parts, it is still cheaper. Right on!
      • 3 Years Ago
      I am fortunate to be old enough to have purchased my last car in my life and am very happy with my Ford Montego. I have purchased only one Toyota and am thankful I never have to purchase another one, nor another non USA made car ever again.
      • 3 Years Ago
      isn't********
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