GM’s January US sales up 2.6 percent, Ford & Toyota down
“All the signs tell me that this economy is going to slow down
further before things start to improve,” said Erich Merkle, vice
president of auto industry forecasting for the consulting firm IRN
Inc. in Grand Rapids.
With the Labor Department releasing figures on Friday showing
that employers sliced payrolls by 17,000, Merkle said consumers are
likely to become a little nervous about their own jobs.
“A new vehicle purchase is one of those things that you can
hold off on,” he said.
But despite the slowing economy, GM, led by strong crossover
vehicle sales, reported an increase of 2.6 percent. The world’s
largest automaker by sales grew its share of the U.S. market to
23.9 percent last month, up from 22.2 percent in January of last
year.
But Toyota Motor Corp., Ford Motor Co., Chrysler LLC, Nissan
Motor Co., and Honda Motor Co. all saw their sales drop.
Toyota, which had seen strong growth last year, said its January
sales dropped 2.3 percent, to 171,849. Its performance still was
strong enough to beat Ford for the No. 2 U.S. sales spot.
At Ford, sales declined 4 percent even when compared with a weak
performance a year ago. The company said it sold 159,355 light
vehicles for the month as it continued a strategy to wean itself
from low-profit rental car sales. George Pipas, Ford’s top U.S.
sales analyst, said sales to daily rental fleets were down 5
percent in January.
Chrysler saw its U.S. sales drop 12 percent as the company also
tried to cut fleet sales. Chrysler’s car sales were up more than 25
percent year over year, but truck sales dropped 23.5 percent.
Nissan sales dipped 7.3 percent for January, while Honda’s fell
2.3 percent.
The overall decline means that automakers likely will raise
rebates and zero percent financing in the coming months to
stimulate demand, said Jesse Toprak, executive director for
industry analysis at the auto information site Edmunds.com.
“It’s certainly a buyer’s market,” he said.
With the Federal Reserve ordering two big interest rate
reductions in just over a week, the companies’ auto financing arms
will be more likely to try to spur sales with low rates, he said.
“Falling interest rates bode well for the market. Today’s
buyers are awash in good deals and good products,” said Toyota
spokesman Xavier Dominicis.
GM saw nearly flat car sales, but its truck sales were up,
fueled by its new crossover vehicles, the Buick Enclave, Saturn
Outlook and GMC Acadia. Sales of those three vehicles combined more
than doubled for the month.
Mark DiGiovanni, GM’s executive director of global market and
industry analysis, said January’s increase was the result of a
several-year effort to improve products and gain market share back
from competition.
“This isn’t a one-hit wonder,” DiGiovanni said. “It’s not a
one-month blip. It’s a two-and-a-half year trend.”
GM raised its average incentive spending in January to $3,402,
about $1,000 more than January of last year, Toprak said. But it
did so on pickup trucks and other slower selling models rather than
across the board, he said.
Toyota saw car sales fall due in large part to an 18.7 percent
drop in sales of its Corolla small car. But truck sales were up 2.2
percent, including a 91 percent increase in Tundra pickup sales. A
revamped Corolla is just hitting the showrooms, which hurt sales of
the old model, company officials said.
Ford’s car sales dropped 10.3 percent, while its truck sales
slipped 0.7 percent. Ford said sales of its crossover vehicles, the
Ford Edge and Lincoln MKX, improved with Edge sales up 95 percent
and MKX rising 78 percent. A revamped Focus small car saw sales up
44 percent.
But sales of sport utility vehicles and pickup trucks fell. The
F-series pickup, the top-selling vehicle in the U.S., saw an 8.4
percent drop, while Explorer SUV sales fell 18.7 percent compared
with January 2007.
Automakers vowed not to get drawn into an expensive incentive
war this year despite the challenging market. Jim Farley, Ford’s
group vice president of marketing, said the company will target
incentives to certain regions but won’t spend any more overall than
2007. He pointed out that Ford and GM were the only major
automakers to decrease incentive spending in January compared to
the year before.
“We’re continuing to run our business as we had, which is the
same as our plan: Match our supply to demand and run our business
profitably,” Farley said.
Mark LaNeve, GM’s vice president of North American sales,
service and marketing, said the company will likely be more
aggressive on incentives than it was in 2005 and 2006, especially
as it tries to compete with new pickups coming this fall from Ford
and Chrysler. But he said incentives will be targeted and sparing.
DiGiovanni applauded the recent interest rate cut and proposed
federal economic stimulus package, saying that even though
automakers don’t expect consumers to spend their stimulus money on
cars, the package will give an immediate psychological boost.
“For our business, consumer confidence is really the key,” he
said. “Everybody will feel better about themselves, about the
security of their jobs, about their mortgages.”
