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GM, Ford post lower U.S. sales, Japanese gainPosted by Retirement on: 2005-10-04 06:57:55 in category:
Stocks & Securities [ Print | Permalink / 0 Comment(s) ] Tuesday 4 October 2005, 10:44pm EST By Poornima Gupta DETROIT, Oct 3 (Reuters) - General Motors Corp. (GM.N: Quote, Profile, Research) and Ford Motor Co. (F.N: Quote, Profile, Research) on Monday posted big declines in U.S. vehicle sales in September as employee pricing discount programs lost their allure and sales of traditional SUVs plunged on higher gasoline prices. By contrast, Asian rivals Toyota Motor Corp. (7203.T: Quote, Profile, Research), Honda Motor Co. (7267.T: Quote, Profile, Research) and Nissan Motor Co. (7201.T: Quote, Profile, Research) posted double-digit gains, and Toyota said its third-quarter sales were the best-ever in the United States. And U.S. automakers don't see sales getting any better this month after the generous summer deals based on prices charged to employees pulled fall and winter customers into the market earlier. "I expect October to be a bit rocky," Paul Ballew, GM's head of global market and industry analysis, said. "Detroit has been trying to stimulate sales, basically pull sales from the future, by reducing prices while their competitors overseas have focused on producing better products," said Thomas Leritz, portfolio manager with Argent Capital Management in Clayton, Missouri. "It's history repeating itself," he added. "You go back to the '70s, during those oil shocks the Japanese took market share." Japanese automakers have been relentlessly increasing their share of the U.S. market, stealing sales from Ford and GM, which have been struggling with issues ranging from excess inventory to a shift in consumer taste away from larger sport utility vehicles. South Korea's Hyundai Motor Co. (005380.KS: Quote, Profile, Research) is also gaining ground on America's two largest automakers, with sales in September rising 9.1 percent. GM, which since June 1 has been selling 2005 model-year vehicles at the same low prices it offers to employees, saw its September sales fall 24 percent, while Ford's dropped 20 percent after a two-month gain, adding to the mounting financial hardships at the Big Two. But in a bright spot for Detroit, the U.S.-based Chrysler unit of Germany's DaimlerChrysler (DCX.N: Quote, Profile, Research) (DCXGn.DE: Quote, Profile, Research) said September sales rose 4 percent. Both Ford and Chrysler followed GM's lead in offering employee discounts. All sales figures are adjusted for the number of selling days and exclude the automakers' foreign brands. Vehicle sales across the industry weakened to seasonally adjusted annual rate of 16.4 million units, well below the 17.4 million rate last year and 16.8 million sold in August, according to industry-tracking firm Autodata. SUV SALES HIT Analyst Jesse Toprak of consumer research firm Edmunds.com said the U.S. automakers' sales declines were not surprising because of the "pay back" effect following their strong performance earlier in the summer and low inventory levels, which have affected availability on some model lines. "The summer clearance we usually see in September occurred in July and August this year," Toprak said. Exceptionally strong sales in any one month can weigh on near-term future demand, commonly referred to as the "pull-ahead" or "payback" effect. Nissan's sales in September jumped 16 percent, meanwhile, and Toyota's sales were up 10 percent. Rival Honda saw its sales increase about 12 percent. Official final industry totals and market share data will be available on Tuesday when VW and its Audi unit report September sales. Shares in Honda rose 3.53 percent on Tuesday morning in Tokyo to an all-time high of 6,740 yen, while Nissan gained 1.99 percent to 1,335 yen, a two-year high. Toyota fell 0.57 percent to 5,270 yen, but has added about $10 billion in market capitalisation over the past week to once again become Asia's most valuable company, worth $168 billion. Sales of large gas-guzzling SUVs for GM and Ford declined significantly last month as U.S. gasoline prices soared well over $3 a gallon in many parts of the country following Hurricanes Katrina and Rita. "There is legitimate pressure on some utility categories and I would describe those as the traditional truck-based utilities," GM's Ballew said. SUV and truck sales at GM were off 30 percent. Sales of its big Tahoe SUV dropped 56 percent. Sales of traditional SUVs at Ford were off 51 percent compared with last September. Sales of Ford's large Expedition SUV fell 60 percent, while its mid-size Explorer was down 58 percent. Its F-Series pickup trucks were down 30 percent. Edmunds.com's Toprak said he expected sales of large SUVs from U.S. automakers to fall further this year. The consumer research firm also said September spending on incentives for GM, Ford and Chrysler was the lowest since April 2003. The Detroit automakers spent a combined average of $3,140 per vehicle on incentives last month, down $476 from August. Homepage Other open community sites http://www.business-business.biz Please support our sponsors: To design your custom retirement plan. http://www.retirement-plan.us For planning IRA rollovers. http://www.ira-rollover.us Professional asset allocation and the wonders it can do. http://www.asset-allocation.us Professional money management- Nationally ranked performance. http://www.roth-ira.us Managers selected to fit your needs. http://www.money-managers.us |
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