February Car Sales Exceed Expectations
U.S. sales of new cars and light trucks fell about 3.5% in February from strong levels a year ago, but the results were far better than expected and prompted analysts to say the auto industry may have weathered the worst of a short-lived U.S. recession.
Underscoring a stronger industry sales outlook and a widely shared belief that the United States is back on the road to recovery, Ford Motor Co. said it was setting its second-quarter North American production estimate at 1.18 million vehicles, an increase of 4%, or 50,000 vehicles, over the same quarter last year.
The boost in output matched one announced this week by General Motors Corp., the world’s largest auto maker and one of the biggest upside surprises in Friday’s sales results.
Analysts had expected GM, which was alone among Detroit’s Big Three auto makers in booking a profit last year, to report a drop of as much as 10% in its February sales. But GM, which launched a new customer incentives program as part of Detroit’s ongoing price wars Friday, said February sales rose 0.4%, as strong demand for its pickups and sport-utility vehicles offset a drop in car sales.
GM also said Chevrolets were outselling Fords for the first time since July 1991.
Heading into 2002, some analysts had feared that U.S. light vehicle sales could drop to a seasonally adjusted annual rate of as low as 15.2 million vehicles in February from a unusually robust rate of 17.5 million in the same month last year.
Those forecasts were later revised upward to the range of January’s 15.8 million sales rate. But excluding results from Isuzu Motors Ltd., February sales ran at an actual rate of 16.6 million vehicles.
Ford, the world’s No. 2 car maker, said its sales last month dropped 13.5%, excluding import brands. While admitting it was “not a gold medal month for Ford,” George Pipas, the company’s chief sales analyst, said he had earlier expected sales to drop as much as 20% from February 2001.
At the Chrysler side of DaimlerChrysler AG , February sales fell 11%, less than the lower end of some forecasts. Gary Dilts, Chrysler’s sales chief, said the first two weeks of February were slow but sales picked up markedly in the final half of the month.
Despite generally good news from Detroit, foreign auto makers were likely to continue gaining share in the U.S. market.
Toyota Motor Co. said February U.S. sales were up 1.7% and Nissan Motor Co. Ltd. said sales rose 8.8%. South Korea’s Hyundai Motor Co. Ltd., touted as one of the global auto industry’s undisputed success stories this year, said U.S. sales rose 15%. Mitsubishi Motor Corp. said sales rose 31%.
General Motors also said Friday is would bring back no-interest loans on some models as an alternative to as much as $2,002 cash back, while Ford and Chrysler responded by extending incentives to compete for sales.
The latest plan from General Motors, which began no-interest loans in September and switched to cash rebates in January, runs through this month. Ford on Tuesday will extend through April 8 its rebates of up to $2,500 or zero-percent financing. Chrysler through March is continuing cash back of as much as $2,500.
On the New York Stock Exchange, General Motors shares rose $1.99, to $54.97 while Ford gained 76 cents, to $15.64. The U.S. shares of Stuttgart, Germany-based DaimlerChrysler increased $1.62, to $41.50.
