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GM, Ford U.S. Sales Fall, Industry Up
General Motors Corp. and Ford Motor Co. on Tuesday capped 2004 with another month of weaker sales, but a stronger performance by top foreign automakers pushed results to their highest levels since the record month of October 2001.
Despite a crop of new vehicles and hefty incentives, GM and Ford ended 2004 with market share losses of about one percentage point, while Chrysler and Japan's Toyota and Nissan continued to post gains.
"The strength of sales in the month of December was the surprise of the month," said Joseph Barker, manager of North American sales analysis with CSM Worldwide. "High inventories, high incentives and an added push to end the month on a strong note, all those things combined," to boost sales, he said.
Total sales across the industry rose 3.7 percent in December to 1.54 million vehicles, for a seasonally adjusted annual rate of 18.4 million vehicles.
That was the highest monthly rate since the industry first offered interest-free financing in an attempt to boost sales following the Sept. 11 attacks, and far above estimates of a range between 17.3 million and 17.6 million.
For the year, sales totaled about 16.9 million vehicles, making 2004 the third strongest year ever for the industry.
GM, the world's largest automaker, said sales excluding its Saab brand fell 6.8 percent in December to 425,303 vehicles.
YEAR OF CAR
Ford, which proclaimed 2004 the "year of the car" when it hoped new models like its Mustang sports car would boost results, reported a 3.6 percent drop in sales for December.
Ford's results exclude its foreign brands Volvo, Jaguar and Land Rover, which posted mixed results. All sales results are adjusted for an extra selling day in December 2004.
Sharply weaker sales for many of Ford's sport utility vehicles, including the Explorer and Expedition, offset gains from new cars, including the Mustang and Five Hundred sedan.
"Clearly the oil situation, gas situation, has had an impact on bigger SUVs," said Steve Lyons, president of Ford's core Ford division. He said the run-up in U.S. gasoline prices had not affected sales of full-size pickups, however.
The Chrysler side of DaimlerChrysler AG reported its eighth consecutive month of stronger sales, driven by the success of the new Chrysler 300, the highly touted large sedan.
Japan's Toyota Motor Corp. and Nissan Motor Co. Ltd. both posted double-digit sales gains. Toyota sales climbed 18 percent, while Nissan's sales jumped 32.7 percent, boosted by strong results for its new Pathfinder sport utility vehicle.
MITSUBISHI WOES
Mitsubishi Motors Corp. posted a 41.5 percent plunge in its sales and the president as the chief executive officer of its North American division -- Finbarr O'Neill -- resigned after an abortive attempt to turn operations around. O'Neill left to become CEO of Reynolds & Reynolds Co., which provides software and services to automotive dealers.
Though GM and Ford have both lost market share to foreign competitors, the sales race between their Ford and Chevrolet brands kept many analysts focused on the domestic rivalry.
The Ford division barely outsold Chevrolet last year, with sales of 2,778,678 vehicles, compared with 2,763,238, to retain the title of top-selling sales brand.
Automakers are increasingly turning to more innovative means to lure buyers.
Germany's Volkswagen AG earlier this week said it will offer a year of free car insurance to customers in two states as a new way of attracting business. The move aims to boost VW's U.S. sales, which have suffered since 2002 due to an aging model line-up and intense competition from rivals.
"I've seen everything from rowboats and canoes to mink coats and insurance," Chrysler's Gary Dilts, senior vice president of sales, said of the VW incentive deal.
GM on Tuesday announced its latest incentive offer, giving $1,500 in cash rebates to current owners or lessees of GM vehicles who buy or lease a new GM vehicle.
Text Source: Reuters Limited
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