Ford gains sales; GM, Chrysler stumble
Incentives may be reason for Ford's results
February 4, 2003
BY MARK PHELAN
DETROIT FREE PRESS BUSINESS WRITER
Ford Motor Co.'s car and truck sales rose 4.1 percent in January, bucking a trend that saw General Motors Corp. and DaimlerChrysler AG lose ground compared to a year ago.
Ford's U.S. brands outperformed its European luxury group as sales of Ford, Mercury and Lincoln cars and trucks rose 4.7 percent to 226,758.
GM's sales fell a modest 2 percent, but sales of its highly profitable pickups and sport-utility vehicles plummeted 19 percent. DaimlerChrysler's U.S. sales dropped 10.3 percent as a record January for Mercedes-Benz proved too little to offset major falls at Chrysler Group.
Toyota Motor Corp. had a 5.7-percent drop in January.
Ford's strong January should boost its share of the U.S. market to 21.5 percent, a full point above January 2002, said George Pipas, Ford sales analyst.
Ford notched the increase to 242,555 vehicles despite the sluggish economy and threat of war in the Mideast.
"Ford had all sorts of problems a year ago," said David Littmann, senior economist with Comerica. "This shows they're beginning to remedy them."
On the other hand, high incentives may have driven Ford's success, said Joe Phillippi, a New Jersey-based analyst who advises investors on auto stocks.
"There's so much incentive money out there, and the dealers are being very aggressive," he said. "One has to scratch one's head looking forward, though. Family budgets are being squeezed, and the threat of war is hanging over the economy."
All three automakers stuck to their prediction that 2003 sales would total 16.5 million to 16.6 million cars and trucks, about 500,000 fewer than in 2002.
That economic unease was behind a drastic fall in Chrysler and Dodge minivan sales, said Gary Dilts, Chrysler Group vice president for sales.
"Minivans are a tough segment now," Dilts said. "The consumer is scared, particularly in that segment.
Chrysler might have waited too long to raise its incentives in January, Dilts said. The company announced a program Monday that allows customers to turn in leased vehicles early in exchange for a new Chrysler, Dodge or Jeep.
DaimlerChrysler's U.S. sales fell to 144,872 cars and trucks, down 10.3 percent from a year earlier. Chrysler Group sales fell 11.7 percent to 129,222, while Mercedes-Benz had its best January ever, selling 15,650 vehicles, up 3.7 percent.
GM's 2-percent drop to 292,330, a better result than most analysts expected after the company had a strong December.
"There was definitely a little payback," said Jacques Moore Jr., president of Jacques Moore Cadillac in Richmond, Va. "We've been dragging a lot of business forward."
In a development that could mean trouble for GM, the company's truck sales plummeted 19 percent, while sales of its less-profitable cars rose 24 percent.
"It was more a case of weakness in GM's trucks than strength for their cars," said Saul Rubin, who evaluates automakers for investment house UBS Warburg.
Buyers also could be growing jaded with 0-percent finance deals, another potential problem, said Paul Ballew, GM executive director of market and industry analysis.
"We do worry 0-percent financing may be losing some of its bite," Ballew said. "It remains one of the most effective tools in the business, however."
Ford also says 0-percent has lost some of its magic, but still helped drive the Ford Taurus and Mercury Sable to 22.4- and 27.2-percent gains, respectively, Pipas said.
Ford's luxury Premier Automotive Group saw sales fall at two of its European luxury brands. Jaguar's U.S. sales fell 24.7 percent to 3,544 cars, mostly due to a 39.4-percent decline for its entry-level X-Type sedan to 1,673 cars. Land Rover sales fell 13.7 percent to 3,021 trucks. Sales for Ford's Volvo unit rose 12.9 percent to 9,232 cars and SUVs.
GM sold 144,475 cars and 147,855 in January. Truck sales slipped to 147,855.
"We view the year ahead with a degree of apprehension," Ballew said about the possibility of war and the sluggish U.S. economy.
The decrease in truck sales was partially due to strong sales of GM pickups and SUVs in January 2002, he said. Conversely, car sales benefited from higher fleet sales than a year ago.
Buick, Cadillac, Pontiac, Saab and Saturn all posted double-digit sales gains for the month.
Chevrolet and GMC sales fell 17.6 percent and 19.5 percent, respectively, largely due to the decrease in truck sales. The big losers at Chrysler included the Jeep Grand Cherokee, down 22 percent to 10,516 sales; and Dodge Caravan minivan, down 23 percent to 11,431 sales.
"January was a tough month for us," Dilts said.
Honda Motor Co. had its best January, propelled to 90,003 sales thanks to a 21.4-percent increase in light-truck sales.
Toyota's sales slipped to 119,329, despite more than doubling sales of its Corolla subcompact to 20,167.But Toyota's bread-and-butter Camry sedan fell 25.2 percent to 27,003 sales.
My first car was a 67 Mustang Coupe, 2nd one was a 67 Cougar XR-7, 3rd one was a 66 Mustang Coupe. Why did I get rid of these cars for ? I know why, because I'm stupid, stupid, stupid.
My next Ford.....