Incentives, Economy Up November 2003 Car Sales

DETROIT December 3, 2003; John Porretto writing for the AP reported that automakers are bullish about prospects for December and the start of next year after strong November sales that got a boost from richer consumer incentives, revamped vehicle lineups and an improving U.S. economy.

"The momentum we're seeing in the economy should provide a solid foundation for auto sales in 2004," Jim O'Connor, Ford Motor Co.'s vice president for North American marketing, sales and service, said Tuesday after Ford reported a slight increase in business last month.

General Motors Corp., the world's largest automaker, led the way with a 22 percent increase from a year ago. Sales of trucks such as the Chevrolet Silverado and Avalanche and GMC Sierra were up 30 percent. Car sales jumped 12 percent.

Several foreign automakers also reported double-digit sales increases, including the American arms of Toyota, Nissan, Hyundai, Mazda, Volkswagen and Porsche.

"A strong rebound in retail sales, especially in big-ticket items, continues to fuel a broad economic recovery," said Jim Press, executive vice president and chief operating officer of Toyota Motor Sales USA.

With an increase of 12.8 percent over last November, Toyota had its best-ever November in the United States. So did BMW and Porsche Cars North America.

Strong-selling trucks and SUVs also helped Ford and DaimlerChrysler AG's Chrysler Group post sales increases last month, though much smaller than rival GM. Sluggish car business hampered both companies.

Most analysts predicted sales of new cars and trucks to rise last month from October and a year ago thanks to hefty showroom bargains, which are likely to continue for the remainder of the year. Many automakers also improved incentives to end 2002 as they tried to meet year-end sales goals.

Also helping, analysts and automakers said, is a strengthening economy that bodes well for business heading into 2004.

"GM's November sales reflected substantial increases across nearly every segment," said John Smith, GM's group vice president for North American sales, service and marketing.

The seasonally adjusted annual sales rate for November was 16.8 million units, about 800,000 more than last November and significantly higher than October's 15.6 million selling pace. The sales rate, known as SAAR, indicates what sales for the full year would be if they remained at the same pace for all 12 months.

Sales of Ford, Lincoln and Mercury brand cars were off nearly 8 percent from a year ago, while truck sales - which include pickups, SUVs and minivans - rose 4.3 percent. That added up to an overall increase of less than 1 percent at the world's No. 2 automaker, Ford.

At Chrysler, a 4 percent reduction in car sales combined with a nearly 5 percent climb in truck volume for an overall increase of 3 percent.

Since its introduction in September, Ford's redesigned F-150 has contributed to three straight months of double-digit growth for Ford's F-Series trucks, which account for a quarter of the automaker's sales.

Sales of the Escape, the company's small SUV, were up 14 percent from a year ago.

Ford hopes to boost car sales with several new offerings next year, including the large Five-Hundred sedan and a new Mustang. Through November, Ford's total U.S. sales were off 4.3 percent.

Chrysler, whose sales so far this year are down 4 percent, was led last month by the Dodge Ram pickup, revamped Durango SUV and the Jeep Wrangler. Ram sales were up 15 percent from a year ago.

GM, whose Cadillac division had its best November since 1989, is now down 1.7 percent in U.S. sales this year from the same period in 2002. The automaker has had two straight years of U.S. market share gains, but a "three-peat" in unlikely unless it has another blowout sales month in December.