DETROIT (AP) — General Motors' U.S. car and truck sales jumped 27 percent in April as the economy continued to improve and $4 a gallon gasoline pushed buyers into more fuel-efficient vehicles.
The largest U.S. car company sold 232,538 vehicles last month, led by a shift to small cars and crossover vehicles.
"Recently, rising fuel prices have led many to re-think their vehicle choice," said Don Johnson, GM's vice president of U.S. sales.
GM, the first major automaker to report sales Tuesday, is much better prepared for higher gas prices than in the past. It offers a wider selection of smaller vehicles. GM used to rely more on sales of pickup trucks and large SUV for profits. But sales of those vehicles would fall when pump prices spiked because they used more gasoline.
The company sold more than 25,000 Chevrolet Cruze compact cars in April, the best month for the car since its introduction in October.
Johnson said the Chevrolet Equinox and GMC Terrain crossovers posted big sales increases in April as the shift toward smaller and more efficient vehicles accelerated from March.
Crossovers are like sport utility vehicles, but are more fuel efficient because they are built on car platforms.
Analysts expect overall industry sales in the U.S. to increase 19 percent from April 2010
Compact cars made up nearly 15 percent of U.S. sales a year ago, but that rose to about 17 percent in April, Johnson said.
GM to benefit from Japan shortages, analyst says
NEW YORK (AP) — General Motors Co. should benefit more than any U.S. competitors from the shortage of Japanese cars resulting from the earthquake in Japan, a Credit Suisse analyst wrote Tuesday in upgrading the stock.
That could boost the biggest U.S. automaker's earnings this year by 60 cents a share, Credit Suisse said.
The report came the same day that GM reported its U.S. car and truck sales leaped 26 percent in April as the economy continued to improve and $4-a-gallon gasoline pushed buyers into more fuel-efficient vehicles.
The automaker is much better prepared for higher gas prices than in the past because if offers a wider selection of smaller vehicles.
THE SPARK: Credit Suisse upgraded its 12-month rating on GM stock to "Buy" from "Neutral." It also raised its estimate for GM's fiscal 2011 earnings to $4.50 a share from $3.90 and its target share price to $42 from $35. The shares have traded between $29.17 and $39.48 over the past 52 weeks.
THE ANALYSIS: Credit Suisse analyst Colin Langan said while his firm has been cautious on GM's prospects, "We now view the Japan situation as the catalyst we've been looking for to carry GM through its weak launch period. Credit Suisse also sees GM's first-quarter earnings rebounding from a weak fourth quarter, Langan wrote.
GM, which received a $50 billion bailout from the Bush and Obama administrations, has made a remarkable comeback from bankruptcy and is on pace to claim the title of world's biggest automaker this year, retaking the top spot from Toyota.
SHARE ACTION: GM shares advanced 75 cents, or 2.3 percent, to $32.93 in early afternoon trading Tuesday. Earlier they surpassed $33, the price at which the government sold nearly half of its GM shares in a $15.8 billion initial public offering in November.