Sales gains by GM surprise industry
General Motors Corp. accelerated last month, providing a bit of unexpected good news for the beleaguered U.S. auto industry.
Sales of GM cars and light trucks rose 3.9% in February from a year earlier, according to figures released Thursday by Autodata Corp. And the world’s biggest automaker improved its share of the U.S. vehicle market to 24.4%, a point higher than in February 2006.
That was in sharp contrast to Wall Street forecasts. Analysts predicted that GM’s sales would be down by 7% or more as the company continued to cut back sales to rental car companies and corporate and government fleets.
“The big surprise to everybody was GM,” said auto analyst Alex Rosten of Edmunds’ AutoObserver.com. “Nobody expected their retail sales to be as strong as they reported.”
Despite GM’s performance, sales declines at Ford Motor Co. and Chrysler Group reduced the traditional Big Three automakers’ share of the U.S. market to 54% from 56.6% a year earlier. The picture is even grimmer when January’s results are included: Year to date, the Big Three’s domestic market share is down to 52.4% from 56.2% a year earlier.
U.S. car companies have been losing market share to Asian rivals as American motorists have turned away from big sport utility vehicles and pickup trucks to smaller, more fuel-efficient cars and light trucks.
The move by GM and Ford to reduce their reliance on lowmargin rental and fleet sales also has put a big dent in their overall sales, although the strategy has allowed them to cut costs by closing factories and shedding workers.
“Ultimately, the Big Three have to continue to scale back production to return to profitability,” said Rosten of Santa Monica-based Edmunds. “And as they scale back, the Japanese and Korean manufacturers are positioned to capture market share.”
Asian automakers grabbed a 39.4% share of the U.S. market last month, up from 37% a year earlier. Toyota Motor Corp. posted a 12.2% year-over-year sales gain as sales of the Camry sedan zoomed 17.5%.
GM’s surprise showing was in part a result of a no-interest financing promotion launched around the middle of the month, Rosten said. But GM also saw strong public response to some of its new products, particularly the redesigned Chevrolet Silverado full-size pickup and the slate of new models at its Saturn subsidiary.
Sales of the Saturn Vue, a so-called crossover vehicle that combines traits of a car and an SUV, jumped almost 42% last month, and sales of the new Aura sedan were strong.
“There’s no better example of how GM has turned around its product line than Saturn,” said David Healy, and analyst with Burnham Securities Inc., who owns GM shares.
Ford reported a 13.9% decline in sales from February 2006. Although a 30% cut in fleet and rental sales contributed to that drop, all-important retail sales were down 8% from a year ago.
Sales of the revived Mustang, a favorite with baby boomers when it debuted two years ago, plunged 19.4%, and sales of the flagship F-Series pickups, a big moneymaker for Ford, tumbled 12.1% in the face of competition from the Silverado and the Toyota Tundra.
Still, Healy noted that Ford appeared to have stabilized sales to its retail customers, which could gain traction as its Edge crossover reaches showrooms in greater numbers and other new products arrive next year.
The February sales report also indicated that gas mileage continued to be a factor in customer buying decisions. Sales of large SUVs fell by 6.3%, and dealers moved 15.2% fewer mid-size SUVs.
Sales of GM’s Hummer H2, often seen as a symbol of Detroit’s fondness for gas guzzlers, fell 19.4%. Sales of small cars rose 6.3%, while those of large and mid-size sedans both dropped.
Sales of Toyota’s Prius gas-electric hybrid jumped almost 87% as the Japanese automaker offered incentives on the vehicle for the first time.
Total U.S. car sales for February were 1.3 million, down 0.5% from a year earlier. Based on the month’s results, Healy said total industry sales should be in the neighborhood of 17 million vehicles this year -- higher than some Wall Street analysts have been forecasting.
The February sales data came out the day after Consumer Reports magazine issued its influential new-vehicle ratings.
Japanese automakers captured the top spots in all 10 of the magazine’s categories, with Toyota and Honda Motor Co. claiming seven.
Also Thursday, GM said it wouldn’t file its annual report with federal regulators until March 16 as it clears up lingering accounting issues.
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February sales
*--* Sales % change YTD (In thous. from market of units) Feb. ’06 share GM 306.2 +3.9% 23.4% Ford 197.2 -13.9% 14.9% Toyota 187.3 +12.2% 15.5% Chrysler 174.5 -8.3% 14.1% Honda 110.0 +3.2% 9.0% Nissan 85.2 +1.2% 7.2% Hyundai 34.5 +1.4% 2.7% Kia 23.5 +13.5% 2.0% BMW 22.6 +15.2% 1.8% Mazda 22.1 -6.4% 1.8%
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Source: Autodata
