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Ford, GM post sluggish sales, cut production

GM, the world’s No. 1 automaker, said overall business was down 7 percent from a record-setting August 2003. Car sales were off 2 percent, while truck sales fell 10 percent.Scott Martin / AP
/ Source: The Associated Press

General Motors Corp. and Ford Motor Co. reported disappointing U.S. sales Wednesday, prompting the nation’s two largest automakers to cut planned vehicle production in the fourth quarter, which could hurt profits.

Meanwhile, the top two Japanese automakers had uncharacteristically underwhelming months. Toyota Motor Corp. saw sales slip nearly 3 percent, while Honda Motor Co.’s business was off 7.1 percent.

The sluggishness, however, wasn’t felt among all major carmakers reporting August results. The Chrysler Group, the smallest of Detroit’s Big Three, said sales rose slightly. Nissan Motor Co., Suzuki Motor Corp., BMW Group and Volvo Cars of North America were among the foreign brands posting sizable sales increases.

GM, the world’s No. 1 automaker, said overall business was down 7 percent from a record-setting August 2003. Car sales were off 2 percent, while truck sales fell 10 percent.

Percentages are adjusted and based on the daily sales rate. There were 25 selling days last month and 27 in August 2003.

“Comparisons to our record sales of last year are tough,” said John Smith, GM’s group vice president for North American sales, service and marketing. “Still, our sales last month fell somewhat short of our expectations.”

No. 2 Ford also had a sub-par month, saying overall sales of its Ford, Lincoln and Mercury brands fell 5.9 percent, again pulled down on the car side. Car sales were off 22 percent. Truck sales grew 1 percent.

The losses occurred despite heavy spending on consumer incentives at both GM and Ford.

But Nissan’s U.S. arm, which continues to grab more domestic market share, said sales so far this year are up nearly 23 percent from a year ago.

“Nissan and Infiniti are both performing very strongly in a difficult industry with a lot of competitive and incentive pressures,” said Jed Connelly, senior vice president of sales and marketing for Nissan North America.

Analysts and industry executives cautioned not to read too much into August’s tallies, which were diminished somewhat by Hurricane Charley in Florida and the fact that last year’s results included a bit of a boost from the start of Labor Day sales promotions.

High energy prices and declining consumer confidence also likely affected business.

“The first reaction to reported sales figures is to shudder,” said Art Spinella, president of CNW Marketing Research in Bandon, Ore. “Don’t. August is notoriously wacky with delivery rates (in the past five years) as low as 16.5 million or as high as nearly 20 million.”

George Pipas, Ford’s top sales analyst, said: “The timing of the holiday sales event and Hurricane Charley ought to reverse in September, although I say that pausing to note that (Hurricane) Frances in bearing down on the peninsula as we speak.”

Chrysler rode the popularity of its new Chrysler 300 sedan to a 25 percent increase in car sales. A 4 percent falloff in truck sales gave the American-based division of DaimlerChrysler AG a year-over-year gain of 1 percent.

August marked the 10th time in 11 months Chrysler posted a year-over-year monthly sales increase.

Ford is experiencing a drop in car demand as it prepares for the launch later this year of new models such as the Ford Five-Hundred sedan and the redesigned Mustang.

Ford has dubbed 2004 the “year of the car,” but its trucks and sport utility vehicles have carried the load so far. Sales of F-Series trucks, the nation’s best-selling vehicles, rose for the 12th consecutive month in August, coinciding with the introduction of the new F-150 model in September 2003.

GM also hopes to propel sales in the final months of 2004 with the release of several new products, including cars such as the Chevrolet Cobalt, which will replace the high-volume Cavalier; the Buick LaCrosse premium midsize sedan; and the Pontiac G6 performance midsize sedan.

For now, though, to help relieve a backlog of cars and trucks, both companies plan to make fewer vehicles in the fourth quarter than they did a year ago.

GM on Wednesday set its initial fourth-quarter production forecast at 1.29 million vehicles, 6.8 percent less than a year ago. Ford said it plans to build 830,000 vehicles in the fourth quarter, down from 900,000 in the year-ago period. That in turn could affect profits: Automakers consider a vehicle sold when it’s shipped from the factory to a dealer, not when the dealer reaches an agreement with a buyer.