GM’s vehicle sales up 2.6 percent in January

/ Source: The Associated Press

All major automakers except for General Motors Corp. saw their U.S. sales drop in January to start what industry analysts have predicted will be the worst auto sales year in the United States in more than a decade.

GM, led by strong crossover vehicle sales, reported an increase of 2.6 percent in January when compared with the same month last year.

But Toyota Motor Corp., which had seen strong growth last year, said Friday its January light vehicle sales dropped 2.3 percent, to 171,849 in January from 175,850 in January 2006. Its performance still was strong enough to beat Ford for the No. 2 U.S. sales spot.

GM said Friday it sold 250,926 light vehicles in January, up from 244,614 in the same month last year. It saw the increase despite cutting low-profit sales to rental fleets by 6 percent last month to a total of 26 percent of sales. The world’s largest automaker by sales said its car sales rose 0.2 percent, while truck sales were up 4.3 percent.

GM’s truck increase was fueled by strong sales of its new crossover vehicles, the Buick Enclave, Saturn Outlook and GMC Acadia, which the company said had a combined sales increase of 134 percent.

Mark DiGiovanni, GM’s executive director of global market and industry analysis, said January’s results were the result of a several-year effort to improve products and gain market share back from competition.

“This isn’t a one-hit wonder,” DiGiovanni said. “It’s not a one-month blip. It’s a two-and-a-half year trend.”

Toyota saw car sales fall 5.7 percent due in large part to an 18.7 percent drop in sales of its Corolla small car. But truck sales were up 2.2 percent, including a 91 percent increase in Tundra pickup sales.

At Ford Motor Co., sales declined 4 percent even when compared with a weak performance a year ago. The company said it sold 159,355 light vehicles for the month as it continued a strategy to wean itself from low-profit rental car sales. George Pipas, Ford’s top U.S. sales analyst, said sales to daily rental fleets were down 5 percent in January.

Chrysler LLC saw its U.S. sales drop 12.1 percent as the company tried to cut fleet sales. Chrysler’s car sales were up more than 25 percent year over year, but truck sales dropped 23.5 percent.

Nissan Motor Co. sales dipped 7.3 percent for January when compared with the same month a year ago. The company reported selling 76,605 vehicles for the month, down from 82,644 a year ago. Car sales dropped 6.9 percent while truck sales dived 7.9 percent, the company said.

Honda Motor Co. sales fell 2.3 percent from 100,790 in January 2007 to 98,511 last month.

Ford’s car sales dropped 10.3 percent, while its truck sales slipped 0.7 percent. Ford said sales of its crossover vehicles, the Ford Edge and Lincoln MKX, improved with Edge sales up 95 percent and MKX rising 78 percent. A revamped Focus small car saw sales up 44 percent.

But sales fell of sport utility vehicles and pickup trucks, Ford’s traditional cash cows. Sales of F-series pickups, the top-selling vehicles in the U.S., dropped 8.4 percent, while Explorer SUV sales fell 18.7 percent compared with January 2007.

Automakers vowed not to get drawn into an expensive incentive war this year despite the challenging market. Jim Farley, Ford’s group vice president of marketing, said the company will target incentives to certain regions but won’t spend any more overall than 2007. He pointed out that Ford and GM were the only major automakers to decrease incentive spending in January compared to the year before.

“We’re continuing to run our business as we had, which is the same as our plan: Match our supply to demand and run our business profitably,” Farley said.

Mark LaNeve, GM’s vice president of North American sales, service and marketing, said the company will likely be more aggressive on incentives than it was in 2005 and 2006, especially as it tries to compete with new pickups coming this fall from Ford and Chrysler. But he said incentives will be targeted and sparing.

“We want to be competitive but we don’t want to lead the industry in incentives and we certainly don’t want to drive our business with incentives,” he said.

DiGiovanni applauded the recent interest rate cut and proposed federal economic stimulus package, saying that even though automakers don’t expect consumers to spend their stimulus money on cars, the package will give an immediate psychological boost.

“For our business, consumer confidence is really the key,” he said. “Everybody will feel better about themselves, about the security of their jobs, about their mortgages.”

Farley agreed that the rate cut and stimulus could help the economy later this year, but said Ford isn’t counting on that, saying the company’s priority is restructuring the business to meet lower demand while accelerating the development of new products.