Car Sales Set Record Despite Late Slump
U.S. auto sales, often a national economic bellwether, plunged 8% in December to cap a three-month slide and set the table for an anticipated auto industry slowdown in 2001.
But the slowdown will come on the heels of two straight record years, and most industry analysts believe that, at worst, sales of new passenger cars and light trucks this year will fall by only about 1.2 million units.
“That would still make [2001] the third-best on record,” said Wesley Brown, an analyst with Nextrend automotive consultants in Thousand Oaks.
2000 turned out to be the best year ever for the industry, with 17.4 million vehicles sold or leased despite the winter slump. The total broke the record of 16.96 million in 1999.
December’s decline was led by the Detroit-area Big Three auto makers, with General Motors Corp. reporting an 18% drop in sales and Ford Motor Co. and the U.S. group of DaimlerChrysler posting 15% declines. Most European and Asian brands saw sales rise, continuing a trend that had held all year.
Some analysts see the strong showing by imports, which tend to be pricier than domestic brands, as a good sign for the economy.
“There’s a shift to younger, more affluent buyers who don’t react as quickly as their parents to economic forecasts,” Brown said. “They do more research and are more balanced in their approach. They haven’t gone through a real recession, so they don’t jump the first time someone on the news says the economy is getting bad.”
Talk of a weakening economy did not hurt luxury car sales at BMW, he noted, or at Toyota Motor Corp.’s Lexus brand.
Still, most industry watchers believe that slipping consumer confidence, combined with miserable weather in much of the country, did weaken winter auto sales.
The industry’s seasonally adjusted sales rate fell to 15.4 million units last month from 17.5 million in December 1999--the slowest pace since August 1998, Autodata Corp. said. Light-vehicle sales fell 8% to 1.24 million units in December, the industry research group said.
“The blizzards and miserable weather in a lot of parts of the country in the last couple of weeks made this even worse than we had predicted,” Burnham Securities analyst David Healy told Bloomberg News.
Still, Toyota posted a 14% sales gain in December and a 9.7% gain for the year, while Japanese archrival Honda Motor Co. said sales rose 2.7% for the month and 7.6% for the year. Honda sold a U.S. record 1.16 million vehicles, fueled by a 25% rise in sales of the Odyssey minivan and other light trucks. At Nissan Motor Co., December sales were down 5%, but the auto maker still saw an 11% gain in U.S. sales for the year.
Volkswagen of Germany posted gains of 17% for December and 13% for the year, while South Korean car maker Hyundai Motor Co. said U.S. sales rose 31% for the month and 49% for the year.
Toyota’s Camry sedan was the best-selling car in the U.S. for the fourth year in a row, and its Lexus brand edged Daimler’s Mercedes-Benz out of the top spot among luxury brands.
The light-truck segment accounted for a record 49.2% of passenger vehicle sales for the year, up from 48.7% in 1999.
The importers have been chipping away at the domestic auto makers’ passenger car sales for years now, luring customers with vehicles that often top the domestics in performance, quality and content.
In anticipation of a sales slump, all three domestic makers have announced plans to shut factories for short periods early in the year to slow production.
On Wednesday, DaimlerChrysler’s struggling Chrysler Group said it would again idle several factories for a week or more this month to cut production by about 50,000 units. An estimated 30,000 workers will be laid off for at least a week. The Chrysler unit lost $512 million in the third quarter and an estimated $1.25 billion in the fourth quarter.
U.S. sales industrywide during the first few months of the year will look “pale” compared with the pace of early 2000, Bob Rewey, Ford’s group vice president for global consumer services and North America, told Bloomberg.
Ford--which had record sales of 4.2 million cars and trucks in 2000--expects the industry to sell 16 million to 16.5 million total vehicles this year. Ford’s sales rose 1% for the full year despite a slump in sales of its best-selling Explorer after the SUV’s safety was questioned in the wake of the Firestone tire investigation.
GM expects the industry to sell 16.1 million light vehicles in 2001. Ron Zarrella, president of GM North America, said he expects GM’s domestic sales to fall below 2000 levels. GM’s U.S. sales dropped 1.3% for the year to 4.95 million units. Truck sales were up slightly, but passenger car sales fell 2.3%.
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Auto List
The top 20 best-selling vehicles in the U.S. in 2000. as reported by the auto makers.
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Rank Vehicle 2000 1999 ’99 rank % chg 1 Ford F-Series pickup 876,716 869,001 1 +0.9 2 Chevrolet Silverado pickup 642,119 636,150 2 +0.9 3 Ford Explorer 445,157 428,772 5 +3.8 4 Toyota Camry 422,961 448,162 3 -5.6 5 Honda Accord 404,515 404,192 6 +0.1 6 Ford Taurus 382,035 368,327 7 +3.7 7 Dodge Ram pickup 380,874 428,930 4 -11.2 8 Ford Ranger pickup 330,125 348,358 8 -5.2 9 Honda Civic 324,528 318,308 9 +2.0 10 Ford Focus 286,166 55,846 NA* +412.4 11 Dodge Caravan 285,739 293,100 11 -2.5 12 Jeep Grand Cherokee 271,723 300,031 10 -9.4 13 Chevrolet Cavalier 236,803 272,122 12 -13.0 14 Toyota Corolla 230,156 249,128 14 -7.6 15 Chevrolet Blazer 225,948 232,140 18 -2.7 16 Ford Windstar 222,298 213,844 20 +4.0 17 Pontiac Grand Am 214,923 234,936 15 -8.5 18 Ford Expedition 213,483 233,125 17 -8.4 19 Chevrolet S-Series pickup 211,587 233,669 16 -9.5 20 Chevrolet Malibu 207,376 218,540 19 -5.1
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* NA=not available
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Source: Reuters
