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U.S. vehicle sales plunged in February

Automakers got hit where it hurts in February, with U.S. sales of their most profitable vehicles — trucks, sport utilities and large sedans — plunging amid high gas prices.
/ Source: The Associated Press

Automakers got hit where it hurts in February, with U.S. sales of their most profitable vehicles — trucks, sport utilities and large sedans — plunging as consumers reacted to high gas prices and the possible recession. General Motors and Ford announced second-quarter production cuts in the face of falling U.S. sales.

General Motors reported a sales decline of almost 13 percent while Ford's sales slumped 7 percent, Chrysler's tumbled 8 percent and Toyota's fell 3 percent. It was expected to be a difficult month for automakers as consumer confidence continued its slide. Declines in home construction have also significantly weakened truck sales.

GM said its sales decline was led by a 19 percent drop in sales of trucks and SUVs. Sales of Chevrolet full-size pickups were down 29 percent for the month. Large sedans didn't fare much better; sales of the full-size Buick Lucerne were down 26 percent. GM's sales dropped 6 percent in the first two months of the year.

GM said the comparison with last February was a tough one, since retail sales hit a high mark for the year in February 2007. Still, the company responded to the downturn by cutting North American production by 5 percent in the second quarter to 1.08 million vehicles.

Mark LaNeve, General Motors Corp.'s vice president for North American sales and marketing, said that while a weeklong strike at American Axle and Manufacturing Holdings Inc. has idled some GM plants, the company has enough inventory of trucks and SUVs to last at least 60 to 90 days.

"Right now it's not a threat to us doing business given our relatively healthy inventory situation," he said.

Toyota Motor Corp. said its car sales fell 4 percent while its truck sales were flat for the month. Toyota saw particular weakness in its luxury Lexus division, where sales of its flagship LS 460 sedan fell 25 percent for the month. Toyota's overall sales were down 2.5 percent for the year.

Ford Motor Co. said it will cut shifts at three factories by this summer and reduce North American production by 10 percent in the second quarter to 730,000 vehicles. Ford said sales of its crossovers were brisk in February, but buyers shunned its large sedans and SUVs. Its car sales dropped 9 percent while truck sales fell 5 percent. The automaker's sales fell 5.5 percent for the first two months of what is expected to be the slowest year for U.S. auto sales in a decade.

Ford plans to cut shifts at factories in Chicago, Louisville, Ky., and Cleveland to match lower demand for its vehicles. The Chicago factory makes the Ford Taurus and Mercury Sable sedans and Taurus X crossover vehicle, while the Louisville Assembly plant makes the Ford Explorer and Mercury Mountaineer sport utility vehicles. Both will go from two shifts to one starting in the summer. The Cleveland plans makes engines.

Ford's top U.S. sales analyst, George Pipas, said consumers have been moving away from larger sedans such as the Taurus for the last two years. Taurus sales were down 26 percent in February, while sales of the compact Focus were up 11 percent.

"It's not just a Ford thing," Pipas said. "All the action in the passenger car market has been in the small size category and the mid-size category."

Chrysler LLC said its car sales were up 9 percent, largely on the strength of small cars such as the Dodge Caliber subcompact, which was up 10 percent for the month, and the mid-size Dodge Avenger, which was up 60 percent. But its truck sales fell 22 percent. Chrysler's newly redesigned Dodge Caravan minivan was down a disappointing 32 percent for the month.

Nissan Motor Co. bucked the trend in February, reporting a 1 percent sales increase thanks to strong sales of its Versa subcompact. Like other automakers, Nissan also reported strong crossover sales, with its recently redesigned Murano up 6 percent. Ford's Edge crossover was up 46 percent for the month, while GM's GMC Acadia was up 33 percent.

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 adjusted for sales days. There were 25 sales days last month and 24 in February 2007.

GM shares fell 31 cents to $22.97 in afternoon trading while Ford shares lost 35 cents, or 5.4 percent, to $6.18 while Toyota's U.S. shares gained 37 cents to $108.92.