Car Makers See January Sales in U.S. Skid by 5.2%
Auto makers on Friday reported a 5.2% drop overall in U.S. auto sales for January, hit by a slump in demand from rental fleets and a rollback on highly popular no-interest financing deals.
General Motors Corp., Ford Motor Co. and the Chrysler arm of DaimlerChrysler gained market share late last year as strong consumer spending and interest-free financing on vehicles helped drive the recession-hit U.S. economy unexpectedly into an expansion in the final three months of 2001.
But auto makers ended most of the no-interest deals in early January, and that was reflected in a 12.7% dip in monthly sales at GM, a 12.6% drop at Ford and a 9% fall at Chrysler.
Those declines--which do not include U.S. sales of foreign brands owned by Detroit auto makers--came despite a January rise in U.S. consumer sentiment for a fourth straight month to its highest level in a year.
GM, the biggest auto maker, said it sold 43,000 fewer vehicles than in January 2001. Nearly 40,000 of the vehicles in that loss came from a sales drop to bankrupt rental car company ANC Rental Corp., which runs the National and Alamo rental car chains. GM said its total retail sales were flat and its truck sales were up 10%.
No. 2 auto maker Ford also said declines in fleet sales hurt its results, but it saw weakness in the retail market as well.
U.S. light-vehicle sales totaled 17.2 million units in 2001. That was the second-highest yearly total in the country’s automotive history despite the recession and economic fallout from the Sept. 11 terrorist attacks on the World Trade Center and the Pentagon.
January sales ran at a seasonally adjusted annual rate of 15.8 million units. That defied gloomy predictions late last year--when some industry analysts said January sales could slow to an annual rate of under 15 million units--but was slightly below more recent estimates of 16 million.
And U.S. auto makers acknowledged that even without zero-percent financing, sales were artificially propped up by aggressive price cuts that erode their profitability.
All of Detroit’s auto companies have been hurt by the recession, quality problems, overcapacity and tough competition from Asian and European rivals.
But Ford, the world’s No. 2 auto maker, has been hardest hit in the last year. A turnaround plan, which the company unveiled Jan. 11, will close up to seven North American plants and cut 35,000 jobs worldwide, or about 10% of the company’s work force.
There was a bit of good news in Ford’s sales results Friday. Its Jaguar brand said U.S. sales in January rose 87.5%, while its Land Rover brand saw sales jump 133%, fueled in part by consumer demand for its all-new Freelander compact sport-utility vehicle.
Luxury car maker Mercedes-Benz, a German unit of German-American DaimlerChrysler, also performed strongly, registering a 19% gain in January sales.
Japan’s top auto maker, Toyota Motor Co., said its sales rose 7.1% for the month. Japan’s third-ranked auto maker, Nissan Motor Co., said its sales rose 9.6% in January, thanks to its fast-selling new Altima mid-sized sedan, while No. 2 Honda Motor Co. reported that sales for the month were flat against strong results last year.
Other foreign brands that fared well in January included South Korean powerhouse Hyundai Motor Co., which saw U.S. sales rise 22%, and its Kia Motors Corp. affiliate, which reported a 32% increase in sales.
