U.S. auto sales fall 5% in January
U.S. auto sales fell almost 5% in January, dragged down as domestic manufacturers slashed low-profit sales to rental companies.
A 19.6% sales drop at Ford Motor Co. pushed it into an unaccustomed fourth place in the monthly rankings, slightly behind Chrysler Group, which rose 0.5% from a year earlier on sales of several new models.
Toyota Motor Corp. posted a 9.5% gain -- its 20th straight monthly sales increase -- to start the year in second place.
General Motors Corp., despite a 16.7% sales decline driven by its rental sales cuts, remained in first place.
The big declines at Ford and GM should be seen as welcome news, said Alex Rosten, an analyst at online automotive information provider Edmunds.com in Santa Monica.
With Chrysler Group expected to announce a restructuring plan Feb. 14, the three domestic automakers “finally are getting their production in line with demand,” Rosten said.
That demand continues to shrink. In all, the three Detroit-area U.S. automakers’ share of the market fell to 50.6% from 55.7% a year earlier. Asian automakers, led by Toyota of Japan, boosted their share to 42.1% from 37.5%. And European brands, including Chrysler stablemate Mercedes-Benz and those owned by Ford and GM, captured a 7.4% share, up from 6.8% in January 2006.
The foreign brands are gaining as domestic manufacturers, struggling with slumping sales and high costs for labor, employee benefits and production, are closing factories, paying workers to quit and seeking to eliminate steeply discounted sales to rental fleets.
In the past, rental companies absorbed excess vehicles the automakers produced to keep factories running under union contracts that made plant shutdowns difficult and costly. But now excess capacity is being eliminated.
The result is likely to be a permanent shift in the makeup of the U.S. auto market, with Toyota assuming the No. 2 slot from Ford, the longtime runner-up to GM.
Ford, which fell behind Chrysler by 3,282 vehicles in January, cut its rental sales 65% for the month and has said it will reduce full-year sales to rental companies to 710,000 vehicles from 885,000 last year.
“It’s not likely we’ll report a sales increase in any month in 2007,” said George Pipas, Ford’s sales and market analyst. “Our goal for 2007 is to stabilize our retail share in the U.S. market.”
GM said it cut January rental fleet sales almost 40%. Chrysler Group -- maker of Chrysler, Dodge and Jeep vehicles -- said it too had reduced rental sales but declined to provide specifics.
Many analysts had expected Toyota to post a double-digit percentage gain for January, but sales of its full-size Tundra pickup truck and several full-size Toyota and Lexus sport utility vehicles fell.
Weakened demand for big pickups and SUVs was felt across the industry. Worries about the strength of the housing market held down pickup sales, and customers continued to shy away from gas-guzzling large SUVs, said Rebecca Lindland, a Lexington, Mass.-based automotive analyst at Global Insight.
Toyota’s Japanese rival Honda Motor Co., in fifth place, reported a 2.4% increase, largely on the strength of its SUVs and the mid-size car-based Ridgeline pickup. Honda’s light trucks are among the most fuel-efficient sold in the U.S.
Nissan Motor Co. reported an 8.9% increase, driven by sales of its new Versa subcompact and redesigned Altima sedan and Infiniti G35 sports sedan and coupe models.
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