Sales Decline at GM and Ford
General Motors Corp. and Ford Motor Co. posted sales declines last month, contributing to costly production cuts at the nation’s two largest automakers, while Japanese rivals and the smallest of Detroit’s Big Three made impressive gains.
Moreover, GM and Ford said Tuesday that sales of big trucks and SUVs -- vehicles that provide the highest profits -- were down sharply from a year ago, apparently the victim of consumer worries about high fuel prices.
Both firms said they would produce fewer vehicles in the remainder of the first quarter and in the second quarter versus a year earlier -- cutbacks that are sure to hurt revenues and profits.
GM, the world’s largest automaker, posted a 12.7% decline after a 1% increase in January. Ford, the No. 2 U.S. automaker, said sales of its domestic cars and trucks fell 3% in February -- its ninth straight month of lower sales versus a year earlier.
But DaimlerChrysler’s Chrysler Group said sales rose 7.5% on another month of sizzling car business, which was up 21% from a year ago. Truck sales rose 4%.
Industrywide, vehicle sales were off 1.9% from February 2004. The seasonally adjusted sales rate was 16.3 million units, up from 16.2 million in January but off from 16.5 million a year earlier. The rate indicates what sales would be for the full year if they remained at the same pace for all 12 months. Full-year sales for 2004 were about 17 million.
Once again, the best reports came from Asian companies. Toyota Motor Corp., Japan’s top automaker, said sales at its U.S. arm rose 11% from a year earlier, while Nissan Motor Co. logged a 10% increase -- its best February on record despite a 2% decline in car sales.
Honda Motor Co., hurt in part by an aging version of its high-volume Civic car, said sales dropped 7% from a year ago. Car sales declined 16.5%, and truck sales climbed 7.5%. Honda is in the midst of redesigning its entire Civic lineup for 2006.
Industry executives and observers say consumer concern over fuel prices is partly to blame for the decline in sales of big SUVs. For example, demand for the four-wheel-drive Ford Expedition, which the Environmental Protection Agency says gets 14 miles per gallon in city driving and 18 mpg on the highway, is off nearly 25% this year.
Another factor in the shying away from hulking SUVs, analysts say, is the increasing number of crossover vehicles on the market. Crossovers have characteristics of a car, minivan and SUV and seem to be a happy medium for drivers who like the stylishness and on-road command of an SUV but don’t need the off-road ruggedness.
