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Fuel Efficient Cars

May 4, 2011 by staff 

Fuel Efficient Cars, Despite higher gas prices, car sales rose in the Untied States in April, including a larger than expected profit for General Motors.

GM said Tuesday that U.S. sales increased 27% last month compared with a year ago, driven by strong demand for low consumption cars and crossovers.

“Rising fuel prices have led many to rethink their choice of vehicle,” said Don Johnson, GM vice president of sales.

Car sales of the flagship company of the economy, the Chevrolet Cruze, were the best since it was launched in 2008.

But GM (GM) was not the only benefit from a renewed interest in fuel-efficient vehicles.

Hyundai said total U.S. sales in April were a record high of 61.754 units, up 40% over last year and the second best month in the history of the automobile. Kia Motors, which is partly owned by Hyundai, also reported record sales for the month.

“Hyundai took over from the Japanese automakers,” said Jessica Caldwell, ananlyst at Edmunds.com.

Caldwell said that Hyundai was “dangerous” to sell more cars than its biggest rival Nissan, which reported a 12% gain in April sales.

Toyota Motor (TM) reported a 1.3% increase in total U.S. sales, while Honda Motor (HMC) said sales rose 9.8% in April.

0:00 / 3:43 Ford to increase production of benefits
Jesse Toprak, senior vice president of industry trends in TrueCar.com, said car sales have helped U.S. last month by the “hysteria limited” by a shortage of Japanese cars in the wake of the earthquake and tsunami that struck the nation on 11 March.

“Many customers ran out and bought in April for fear that these cars would run,” he said. But he added that Toyota and Honda might have missed an opportunity by not having enough cars in stock.

The general trend in auto sales reflects a growing appetite for cars that offer greater fuel efficiency now that gas prices are approaching record levels,anlysts said.

In April, the national average price for a gallon of regular gasoline rose more than 30 cents and rising above 4 per gallon in many parts of the country.

“The change in consumer preference for smaller vehicles will be in place as long as gas prices stay or go above where they are now,” said Toprak. “It is unlikely we will see a change in this pattern, unless gas prices drop dramatically.”

While Japanese automakers have traditionally led the market for fuel-efficient cars, the major U.S. automakers have been increasing production of small cars in recent years to catch up with the change in consumer confidence.

Ford (F, Fortune 500) said sales rose 16% in April, driven by sales of the Fiesta, Fusion and Focus.

“With gas prices overshadowing and 3.90 a gallon, consumers are paying an even higher priority on fuel efficiency in every size and type of vehicle,” said Ken Czubay, Ford vice president of sales and marketing.

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