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GM's Sales Fall More Than 14%; Industry Slips 2.9%

Posted on: Tuesday, 4 April 2006, 06:00 CDT

By Chris Woodyard

General Motors posted a 14.4% sales decrease in U.S. auto sales in March compared with the same month last year, while the industry overall saw a slight 2.9% decline, Autodata reported Monday.

Ford was down 4.7%, and DaimlerChrysler was up 2.9% for the month.

Among Japanese makers, Toyota was up, Honda was flat, and Nissan was down slightly.

Following the pattern of recent months, sales of most big SUVs remained flat while buyers move to crossover models.

But there were a few surprises. Toyota's hot Prius gas-electric hybrid car showed a 22% sales drop. Spokesman Bill Kwong says the decrease is due in large part to less production to make room on the line for the new Camry hybrid. The Prius is still in short supply, he added.

GM's poor sales performance approaches the hangover the automaker saw last year after its big summer discount program. September and October sales were off more than 20% compared with the same months in 2004.

The bulk of GM's March sales decline was in cars, about 22%, compared with nearly 10% for trucks. While sales to rental car fleets -- a low-profit dumping ground for manufacturers trying to unload bloated inventory -- were down, GM also took some of the hit in the showroom. Retail sales were down 17% for the month.

The company said comparisons were skewed by a strong sales performance in March 2005, when lots of incentives were available.

GM "is not where we want to be, but we knew it would be a challenging start to the year," GM market analyst Paul Ballew said in a conference call.

GM has focused on pricing that is closer to sticker and less reliant on incentives. In March, GM showed an uptick in the average sales transaction price per vehicle of about $1,600 compared with a year ago, Ballew said. Bucking the industry SUV downturn, sales remained robust for GM's revamped full-size sport utilities, Chevrolet Tahoe and Cadillac Escalade.

Burnham Securities analyst David Healy expects GM's sales to improve later this year as it starts selling more versions of its full-size SUVs and when it makes over more of its pickup line.

At Ford, the sales drop amounted "to progress toward stabilizing our market share," said sales analyst George Pipas. The company saw big growth in its midsize sedans: Ford Fusion, Lincoln Zephyr and Mercury Milan. Pipas said Zephyr was the biggest surprise.

He said Ford's market share loss is slowing, running at about a half percentage point during the first quarter, compared with 1 percentage point last year.

(c) Copyright 2005 USA TODAY, a division of Gannett Co. Inc.

Source: USA TODAY

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