March Auto Sales Up 0.8% in U.S.: Detroit Companies Decline; Toyota Jumps
By Sarah A. Webster, Detroit Free Press
Apr. 4–Given the economic storm brewing nationwide — a sluggish housing market, rising gas prices and waning consumer confidence — the flat auto sales results in March weren’t so bad.
Consumers bought 1.5 million new cars and trucks last month, a 0.8% improvement over last year but still a slow kick-off for the spring selling season. For the year, sales are now down 1.2%. Truck sales are flat, while car sales are down 1.7%.
Negative trends continued for Detroit automakers, which continued to perform worse than the overall industry.
Sales were down 4.0% at General Motors Corp. and 4.1% for DaimlerChrysler AG, which is exploring the sale of its Auburn Hills-based Chrysler Group unit. Ford Motor Co. posted the worst result of the three, with a decline of 9.0% compared with March a year ago. Of the company’s six brands, only the luxury Lincoln make, boosted by the MKZ sedan, posted a sales gain.
In all, domestic brands for GM, Ford and Chrysler lost 3.6 percentage points of market share in March, capturing just 51.6% of sales in the United States.
Meanwhile, Toyota Motor Corp. continued to steal the spotlight. Sales for the Japanese automaker were up 11.7% in March.
It was as if the same economic headwinds that stymied other automakers actually helped Toyota.
“When the economy gets a little tighter, when fuel prices go up, I think there is a consumer attitude that does say, ‘Hey we ought to take a look at Toyota,’ ” Don Esmond, senior vice president of automotive operations for Toyota’s U.S. sales arm, said during a conference call with journalists.
While Honda Motor Co. sales were up 11.3%, Toyota has been more consistent in its double-digit gains. Toyota’s sales are now up 11.2% for the first three months of the year, while Honda gained a more modest 6.1%.
A key explanation for the discrepancy in performance between Toyota and Detroit’s automakers may be California and Florida, which are the country’s No. 1 and No. 2 auto sales markets.
Ford’s top sales analyst George Pipas said those two states “have exhibited some of the largest declines” in sales.
But not at Toyota.
“Those continue to be our two strongest markets overall in volume,” Esmond said.
David Healy, an automotive analyst with Burnham Securities, said Toyota continues to impress, month after month, for one main reason.
“They have a lineup of models that customers continue to prefer,” he said.
Despite that, Healy, who owns shares of GM, defended Detroit automakers’ results.
He noted that their reliance on pickup trucks used by contractors, electricians, plumbers and other workers has made them more vulnerable to the downturn in the housing market.
He also added that Detroit has been pulling back sharply on sales to rental car companies, a move that has hurt their overall results but will improve their profits, brand image and resale values in the future.
“It distorts the comparison,” he said of the fleet-sale pullback.
Below the surface of the dismal Detroit results, especially Ford’s 9.0% drop, the picture is not so bleak, said George Pipas, Ford’s top sales analyst.
Ford’s retail market share has been hovering around 13% for the past 10 months. Although he was reluctant to say Ford’s retail sales have “stabilized,” he called the performance “an encouraging sign.”
What’s more, the proportion of sales going to car rental companies declined from 21% in the first three months of 2006 to 16% during the same period this year, part of the company’s deliberate strategic move away from low-profit sales.
He also noted that Ford’s newest products, such as the Edge, were performing admirably in the marketplace. The Fusion, which has been featured in a national marketing campaign that compares the sedan to its foreign rivals, posted a 47.5% sales increase in the month. Sales for that Camry- and Accord-fighter are now up 32.9% for the year.
Mazda, which is controlled by Ford, posted a 47.9% sales gain in March, boosting the Japanese automaker’s year-to-date increase to 17.5% compared with the same three-month period a year ago.
GM also said it viewed its March and first-quarter results as “solid,” particularly because it also continued to reduce the number of vehicles being sold to daily rental companies, cutting the number by 16,000 vehicles in March.
The Chevy Silverado and GMC Sierra weren’t immune to the same tough prior-year comparison and housing market softness that its competitors complained about — pickup sales dropped 7% in March compared with a year earlier and also dropped from February to March. Still, GM said it was satisfied with its results.
“We didn’t assess our full-size pickup sales as weak,” GM’s chief sales analyst Paul Ballew said.
Chrysler also found some encouragement: strong sales of the new Dodge Nitro and Jeep Wrangler.
Contact SARAH A. WEBSTER at 313-222-5394 or swebster@freepress.com. Staff writers Katie Merx and Joe Guy Collier contributed to this report.
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Copyright (c) 2007, Detroit Free Press
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