Auto inventories rise in April

[United Press International]

DETROIT, May 7 (UPI) -- Inventories of light vehicles have
risen to a 13-year high because of sluggish auto sales in April, the
Detroit Free Press reported Friday.
Higher incentives are imperative unless automakers cut
production, John Casesa, auto analyst at Merrill Lynch, wrote in a
report released on Thursday, the newspaper said.
Casesa's report appeared shortly after Detroit's automakers
ramped up incentives on their key trucks, especially sport-utility
vehicles.
"This is the third-largest inventory gap since the early
1990s," Casesa said.
Automakers said the industry sold 1.4 million new cars and
trucks in April. That was essentially the same as April 2003, when
the country had just embarked on a war with Iraq, causing consumers
to hold back on purchases.
Because this is the spring selling season and the economy is
on the mend, the performance did not measure up to expectations, the
report said.
As a result of sluggish sales, inventories swelled to about
4.2 million units, or about a 78-day supply, at the end of April,
Rob Hinchliffe, an auto analyst with UBS, said. That is an excess
inventory of about 650,000 cars and trucks, Casesa estimated.