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Go Back   Hummer Forums by Elcova > General Hummer Talk > In the News

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  #1  
Old 03-02-2005, 10:56 AM
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U.S. Auto Sales Drop by 1.9%
Amid Declines at GM and Ford

No. 1 Maker's Market Share
Falls Below 25% Milestone;
Buyers Resist Price Boosts

By SHOLNN FREEMAN
Staff Reporter of THE WALL STREET JOURNAL
March 2, 2005; Page A2

DETROIT -- Hurt by sliding sales of light trucks, General Motors Corp. and Ford Motor Co. lost more ground in the U.S. market last month as overall auto-industry sales declined 1.9%. The two auto makers cut deeper into first-quarter North American production plans and forecast lower output in the second quarter.

The upshot likely will be more layoffs for GM and Ford workers and their suppliers, and possibly better deals for consumers as auto makers are forced to offset more of recent price boosts.

GM's U.S. sales fell 13% in February, the worst performance among the six biggest auto makers in the U.S. market. That slump pushed GM's U.S. market share below 25% for the month.

The last time GM's monthly share was below the 25% level was in the summer of 1998, when a strike halted production at many of GM's U.S. factories, and the auto maker's U.S. share fell as low as 21% in July. For all of 1998, GM sales represented 29% of the U.S. market, according to Autodata Corp.

GM's market share for the first two months of this year is 25.1%, down from 26.9% a year ago and well below the 29% target GM executives aimed for three years ago.

Ford, which has also been losing share in recent years, said sales of cars and trucks in the U.S. fell 2.9%, pushing its share down to 20.2% from 20.4%.

By contrast, U.S. sales rose at DaimlerChrysler AG, Toyota Motor Corp. and Nissan Motor Co. Of the German auto makers, BMW AG saw sales rise, while Volkswagen AG's sales fell 6.2%

DaimlerChrysler's Chrysler group said sales of its U.S. brands rose 7.5% from a year earlier, as the third largest of the big Detroit auto makers continued to separate itself from its crosstown rivals. But the auto maker's overall sales rose 5.5% because of a 17% slump at its Mercedes-Benz luxury brand.

Overall, auto makers in the U.S. market sold 1,254,056 cars and light trucks last month, according to Autodata Corp. The result translated to a 16.3 million seasonally adjusted annualized selling pace for light vehicles, down from a pace of 16.5 million vehicles a year earlier.

Industry executives said U.S. consumers appeared to be resisting efforts by auto makers to raise prices and cut back on discount offers in the first two months of the year.

Auto makers overall raised prices 1.3% in January, the sharpest increase since 1997, said Ford economist Jarlath Costello.

"The only way that you can meet consumer expectations for bigger and bigger discounts is to raise prices and give discounts that are bigger than the price increase," said Art Spinella, president of CNW Research in Bandon, Ore.

Consumer resistance to higher prices appeared to be strongest for GM and Ford models, notably the two auto makers' large sport-utility vehicles and large pickups, among their most profitable vehicles. With gasoline prices rising and increasing competition from smaller, more-fuel-efficient crossover SUVs, there's rising uncertainty over the future of the segments that carried Detroit's Big Three through the 1990s and the earlier years of this decade.

In February, GM and Ford tried to lure SUV buyers with offers of 0% interest for 60 months. GM also cut sticker prices on SUVs by between $1,500 and $2,000. So far, consumers aren't biting. Mike May, vice president of marketing at Ed Morse Automotive, which owns 17 dealerships in South Florida, said consumers are moving to smaller crossover SUVs, partly because of fluctuations in gas prices. "After a while, that hits the pocket book," he said.

Ford sales analyst George Pipas said during a conference call that declining sales of traditional SUVs such as the Ford Explorer are a long-term trend that Ford has prepared for by cutting capacity for such vehicles and developing new crossover SUVs on car chassis.

GM's executive director for market and industry analysis, Paul Ballew, said yesterday that "we have a hard time finding evidence" that full-size SUVS are in long-term decline. The problems, he said, are "payback" for strong sales in the past, and the fact that GM's market-leading crop of large SUVs is heading into its last year of life.

As part of a broader management shuffle yesterday, GM named a new executive to run its North American vehicle sales, service and marketing operation: Mark LaNeve, formerly head of North American sales and marketing. Until September, Mr. LaNeve was general manager of Cadillac and oversaw a rebound in sales of the brand. Mr. LaNeve's predecessor, John Smith, was named to a new post as group vice president for global product planning. North American engineering head Jim Queen and North American product design head Ed Welburn were given global oversight of their respective functions.

GM said it will cut second-quarter North American production by 10% from 1.39 million a year ago to reduce the backlog of vehicles. GM said it will cut an additional 45,000 vehicles from its already-reduced first-quarter North American production schedule. GM's Mr. Ballew said the company had 1.3 million vehicles in inventory at the end of February.

Ford said it plans to build 940,000 cars and trucks in the second quarter, compared with 951,000 vehicles in the year-earlier quarter at its North American assembly plants. Ford will build 650,000 trucks in the quarter, a decline of 7% from the 2004 second quarter.
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  #2  
Old 03-02-2005, 10:56 AM
Klaus's Avatar
Klaus Klaus is offline
Hummer Guru
 
Join Date: Nov 2002
Location: CSA
Posts: 2,511
Klaus is an unknown quantity at this point
Default

U.S. Auto Sales Drop by 1.9%
Amid Declines at GM and Ford

No. 1 Maker's Market Share
Falls Below 25% Milestone;
Buyers Resist Price Boosts

By SHOLNN FREEMAN
Staff Reporter of THE WALL STREET JOURNAL
March 2, 2005; Page A2

DETROIT -- Hurt by sliding sales of light trucks, General Motors Corp. and Ford Motor Co. lost more ground in the U.S. market last month as overall auto-industry sales declined 1.9%. The two auto makers cut deeper into first-quarter North American production plans and forecast lower output in the second quarter.

The upshot likely will be more layoffs for GM and Ford workers and their suppliers, and possibly better deals for consumers as auto makers are forced to offset more of recent price boosts.

GM's U.S. sales fell 13% in February, the worst performance among the six biggest auto makers in the U.S. market. That slump pushed GM's U.S. market share below 25% for the month.

The last time GM's monthly share was below the 25% level was in the summer of 1998, when a strike halted production at many of GM's U.S. factories, and the auto maker's U.S. share fell as low as 21% in July. For all of 1998, GM sales represented 29% of the U.S. market, according to Autodata Corp.

GM's market share for the first two months of this year is 25.1%, down from 26.9% a year ago and well below the 29% target GM executives aimed for three years ago.

Ford, which has also been losing share in recent years, said sales of cars and trucks in the U.S. fell 2.9%, pushing its share down to 20.2% from 20.4%.

By contrast, U.S. sales rose at DaimlerChrysler AG, Toyota Motor Corp. and Nissan Motor Co. Of the German auto makers, BMW AG saw sales rise, while Volkswagen AG's sales fell 6.2%

DaimlerChrysler's Chrysler group said sales of its U.S. brands rose 7.5% from a year earlier, as the third largest of the big Detroit auto makers continued to separate itself from its crosstown rivals. But the auto maker's overall sales rose 5.5% because of a 17% slump at its Mercedes-Benz luxury brand.

Overall, auto makers in the U.S. market sold 1,254,056 cars and light trucks last month, according to Autodata Corp. The result translated to a 16.3 million seasonally adjusted annualized selling pace for light vehicles, down from a pace of 16.5 million vehicles a year earlier.

Industry executives said U.S. consumers appeared to be resisting efforts by auto makers to raise prices and cut back on discount offers in the first two months of the year.

Auto makers overall raised prices 1.3% in January, the sharpest increase since 1997, said Ford economist Jarlath Costello.

"The only way that you can meet consumer expectations for bigger and bigger discounts is to raise prices and give discounts that are bigger than the price increase," said Art Spinella, president of CNW Research in Bandon, Ore.

Consumer resistance to higher prices appeared to be strongest for GM and Ford models, notably the two auto makers' large sport-utility vehicles and large pickups, among their most profitable vehicles. With gasoline prices rising and increasing competition from smaller, more-fuel-efficient crossover SUVs, there's rising uncertainty over the future of the segments that carried Detroit's Big Three through the 1990s and the earlier years of this decade.

In February, GM and Ford tried to lure SUV buyers with offers of 0% interest for 60 months. GM also cut sticker prices on SUVs by between $1,500 and $2,000. So far, consumers aren't biting. Mike May, vice president of marketing at Ed Morse Automotive, which owns 17 dealerships in South Florida, said consumers are moving to smaller crossover SUVs, partly because of fluctuations in gas prices. "After a while, that hits the pocket book," he said.

Ford sales analyst George Pipas said during a conference call that declining sales of traditional SUVs such as the Ford Explorer are a long-term trend that Ford has prepared for by cutting capacity for such vehicles and developing new crossover SUVs on car chassis.

GM's executive director for market and industry analysis, Paul Ballew, said yesterday that "we have a hard time finding evidence" that full-size SUVS are in long-term decline. The problems, he said, are "payback" for strong sales in the past, and the fact that GM's market-leading crop of large SUVs is heading into its last year of life.

As part of a broader management shuffle yesterday, GM named a new executive to run its North American vehicle sales, service and marketing operation: Mark LaNeve, formerly head of North American sales and marketing. Until September, Mr. LaNeve was general manager of Cadillac and oversaw a rebound in sales of the brand. Mr. LaNeve's predecessor, John Smith, was named to a new post as group vice president for global product planning. North American engineering head Jim Queen and North American product design head Ed Welburn were given global oversight of their respective functions.

GM said it will cut second-quarter North American production by 10% from 1.39 million a year ago to reduce the backlog of vehicles. GM said it will cut an additional 45,000 vehicles from its already-reduced first-quarter North American production schedule. GM's Mr. Ballew said the company had 1.3 million vehicles in inventory at the end of February.

Ford said it plans to build 940,000 cars and trucks in the second quarter, compared with 951,000 vehicles in the year-earlier quarter at its North American assembly plants. Ford will build 650,000 trucks in the quarter, a decline of 7% from the 2004 second quarter.
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