FORD
Ted S. Warren  /  AP file
Ford Motor Company was again hit by sluggish sales of SUVs. The automaker's sales in March fell 4.6 percent.
updated 4/3/2006 6:31:29 PM ET 2006-04-03T22:31:29

The U.S. auto industry’s slump hit GM hard in March, when the struggling automaker’s sales fell almost 15 percent while rival Toyota reported its highest ever monthly sales yet.

The sales report Monday was more bad news for General Motors Corp., which lost $10.6 billion in 2005 and has been giving up U.S. market share to Asian competitors, leaving Toyota Motor Corp. nipping at its heels in the race for who can claim the title of world’s largest automaker.

GM car sales dropped 22 percent compared with March 2005 as the automaker eased off on sales to rental fleets, while truck and SUV sales were down 9 percent despite brisk sales of the redesigned Chevrolet Tahoe, which saw a 20 percent increase. GM’s sales were down 5 percent for the quarter.

Paul Ballew, GM’s executive director of market and industry analysis, said the results reflect the company’s goals of cutting sales to daily rental fleets — which have lower margins and hurt automakers’ residual values — and relying less heavily on incentives.

Sales at Toyota rose 7 percent for the month, led by a 15 percent increase in truck and sport utility vehicle sales. While sales of full-size SUVs sank — the Toyota Land Cruiser was down 31 percent from a year ago — sales of the midsize 4Runner rose 15 percent and sales of the redesigned RAV4 crossover shot up 117 percent. Toyota’s sales also were up 7 percent for the quarter.

Jim Press, president and chief operating officer of Toyota Motor Sales USA, said lingering concerns about gas prices are leading buyers to hybrids and smaller, less expensive vehicles. Press said sales of the Prius hybrid dropped 22 percent in March, but only because Toyota was short on production. U.S. dealers have only a five-day supply of the top-selling hybrid, he said. The new Toyota Yaris subcompact was on sale for just a week at the end of March but racked up 1,339 sales with no advertising.

“The price-conscious vehicles are going to become, strategically, a much more important part of the car business,” Press told The Associated Press.

Honda Motor Co. said its sales were up 4 percent for the month, largely on the strength of the hybrid Honda Insight, which saw sales climb 41 percent, and the Ridgeline pickup, which was up 38 percent.

According to Edmunds.com, an online vehicle information service, GM spent $2,691 per vehicle on incentives in March, compared with an average of $3,205 per vehicle at other domestic manufacturers. Asian and European automakers generally spend less on incentives, although those automakers are now at record highs, Edmunds said. BMW AG spent $3,483 per vehicle in March, Edmunds said, while Nissan spent $2,314 and Toyota spent $1,321.

“Everybody’s entitled to play this game, but it does complicate some of the things we’re doing,” GM’s Ballew said.

Gary Dilts, senior vice president of sales for DaimlerChrysler AG’s Chrysler Group, defended incentives spending and said Chrysler plans to announce details of a new incentive program this week. Sales of Chrysler, Dodge and Jeep vehicles were up nearly 2 percent for the month, partly on the strength of the new Dodge Caliber compact. Chrysler’s sales were up nearly 3 percent for the first three months of the year compared with the first quarter of 2005.

Ford said its sales fell 5 percent in March, largely because of waning interest in its SUVs. Sales of Ford, Lincoln and Mercury cars were flat compared with March 2005, but truck and SUV sales were down 7 percent. The Ford Explorer took a 25 percent dive.

Still, Ford’s F-Series truck held its own, posting a 5.5 percent increase for the month. Ford said it was the third consecutive month that sales rose for the nation’s best-selling vehicle, despite growing competition from Asian imports. Ford U.S. sales analysis manager George Pipas said March is traditionally a big month for truck sales.

Ford’s sales were down 2 percent for the first quarter. The automaker, which is in the midst of restructuring its unprofitable North American operations, has said one of its top goals is arresting its U.S. market share decline, and Pipas said there are signs that is happening.

In each of the last five years, Ford has lost one percentage point of market share, which equates to about 250,000 vehicles. Based on first-quarter sales, the company is on track to lose half a point this year, Pipas said. Ford now controls about 17 percent of the U.S. market.

Nissan Motor Co. said sales were off 3 percent, mostly due to a drop in car sales. Nissan’s sales were flat for the quarter.

The Associated Press reports unadjusted figures, calculating the percentage change in the total number of vehicles sold in one month compared with the same month a year earlier. Some automakers report percentages that are adjusted for the number of sales days in a month.

© 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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