General Motors Corp., Ford Motor Co. and DaimlerChrysler AG’s Chrysler Group on Thursday reported lower U.S. sales in November, led by big declines in sales of profitable but fuel-thirsty sport utility vehicles.
But GM, the world’s largest automaker, raised its first quarter production forecast by 6 percent to 1.25 million vehicles, boosting its stock more than 2 percent.
Posting an 11-percent decline in November U.S. sales, the world’s largest automaker said it plans to produce 1.28 million vehicles in the fourth quarter of 2005 and 1.25 million vehicles in the first quarter of 2006.
Ford’s sales fell 18 percent, its third straight month of declines despite new aggressive incentives in mid-November.
The company cut its fourth-quarter production target by 20,000 units to 790,000 vehicles.
For the first quarter of 2006, Ford plans to build 885,000 vehicles, down from the 908,000 units it produced a year earlier.
Production levels are a closely-watched barometer of the auto industry because U.S automakers book profits on vehicles when they are shipped from assembly plants, not when they are sold at dealer lots.
Chrysler said U.S. November sales fell 7 percent, ending 19 consecutive months of year-over-year gains.
The sales figures will likely spread more gloom in Detroit, where U.S. automakers are already grappling with high labor and health-care costs, rising prices for raw materials and transportation and intense competition from Asian rivals.
Japanese rival Toyota Motor Corp., the world’s second-largest automaker, said U.S. sales rose 5.6 percent in November, led by imported cars, with sales of its Prius hybrid up 29.1 percent.
Even though Nissan Motor Co. Ltd. said its U.S. sales slipped 7.8 percent, Asian brands won a record 40 percent share of the U.S. market in October, while GM and Ford sales each fell by 26 percent after the companies stopped offering employee discounts to all buyers.
“The holiday buying season is off to an encouraging start and I believe we’ll see improvement right through the end of the year,” Jim Press, president of Toyota’s U.S. division, said on Thursday.
In October, according to data compiled by Reuters, Toyota had a 15.1 percent share of the U.S. light vehicle market. That was better than the 14.4 percent monthly share at Chrysler and compared with 16.1 percent at Ford and 22 percent at GM.
Highly publicized summer incentives, including the employee discounts used to clear out 2005 model inventories, pulled many potential buyers into the market earlier than they might have been otherwise, creating a “pull-ahead” effect that left the following months with slower sales.
Some analysts last week said November got off to a slow start and predicted that Detroit’s long-running price war, which has eroded profits, will heat up in coming weeks. In mid-November, the domestic automakers sweetened consumer incentives in a fresh bid to lure shoppers.
GM earlier this month launched a “Red Tag” sale, in which anyone in the United States can buy a vehicle for the price its auto parts suppliers’ employees pay. Combined with existing rebates, the program offered a discount of more than $10,000 on some of GM’s largest SUVs, a greater savings than the automaker’s summer sales incentive program.
Chrysler offered debit cards, promoted as two years of free gasoline, worth close to $2,400 each. Ford responded with a program offering reduced prices and rebates.
SUV declines continue
Uncertainty over jobs and the economy may also be dragging on vehicle sales, some analysts said. And the recent drop in U.S. gasoline prices has not done much to reverse a shift in consumer sentiment away from fuel-thirsty SUVs and pickups.
Truck sales at Ford fell nearly 18 percent, with some of its largest SUVs such as the Expedition falling nearly 44 percent in November. Sales of Ford’s popular Explorer SUV plunged 52 percent.
“I think Ford saw catastrophic declines in big SUVs due to a general retreat from that sector because of gasoline prices,” Burnham Securities analyst David Healy said.
“Part of it was also a hangover from sales during the employee discount, and I don’t think we’ve finished seeing payback for that,” he said, adding that he expects to see the pull-ahead effect continue into the next two months.
Still, Ford’s North American sales and marketing chief said overall results were better than in October, and he expects even better results next month.
Analysts expect overall vehicle sales to come in at a seasonally adjusted annual rate of about 15.7 million in November. Last year, the U.S. vehicle sales rate in November was 16.6 million.
Vehicle sales across the industry slumped to a seasonally adjusted annual rate of 14.7 million units in October, their slowest pace in seven years.