Ford, GM to Lower Production in 2005

DETROIT December 2, 2004; Sarah Karush writing for the AP reported that in what has become a familiar pattern, the country's top two automakers reported weak November sales on Wednesday, while Chrysler and the Japanese companies continued to surge ahead.

Both General Motors Corp. and Ford Motor Co. said they would reduce production for the first quarter of 2005 after the disappointing month.

Overall, U.S. vehicle sales fell 1 percent to 1.2 million units. The seasonally adjusted sales rate was 16.4 million units, compared to 16.9 million units a year ago and in October.

The rate indicates what sales would be for the full year if they remained at the same pace for all 12 months. Full-year sales for 2003 were 16.7 million.

GM said its total vehicle sales fell 13.1 percent from November 2003, with a 17.1 percent decline in cars and a 10.3 percent decline in trucks. The company said it intends to produce 1.25 million vehicles in the first quarter, down 7.1 percent from the same quarter last year.

No. 2 Ford said sales of its Ford, Lincoln and Mercury brands fell 4.3 percent in November from the year before, its ninth monthly decline this year. Car sales fell 12.5 percent, while sales of pickups and SUVs were down 0.9 percent. Ford said it would build 930,000 vehicles in the first quarter of 2005, a 7.7 percent reduction.

Both GM and Ford said fourth-quarter production would remain unchanged at the previously announced plan of 830,000 vehicles for Ford and 1.27 million for GM.

Sales at the smallest of Detroit's Big Three, DaimlerChrysler AG's Chrysler Group, rose 8.9 percent - 17.5 percent for cars and 6.8 percent for trucks. It was the eighth consecutive monthly increase, aided by the buzz from its distinctive Chrysler 300 sedan, named Car of the Year by Motor Trend magazine last month.

Trucks drove Nissan's overall increase of 31 percent in November. Sales of pickups and SUVs were up 58.7 percent, while cars rose 10 percent.

``A lot of our new vehicles have been trucks, and our new vehicles have kind of led the game,'' said Jed Connelly, senior vice president for sales and marketing at Nissan's North American division.

Toyota's American division, meanwhile, did best with cars. With the Camry holding its place as the country's best-selling passenger car and sales of the Prius hybrid continuing to climb, Toyota sold 19.2 percent more cars last month than in November 2003. Truck sales fell 1.4 percent, giving Toyota an overall increase of 8.8 percent.

Honda Motor Co. said its sales rose 3.1 percent, boosted by strong results for its Acura models and Honda trucks. Truck sales increased 10.2 percent, while car sales fell 2 percent.

David Healy, an analyst with Burnham Investment Research, said Ford's and GM's lag behind the rest of the industry is likely to continue.

``Unless they really pound on incentives, which they didn't in the month, they're going to keep losing market share,'' he said of GM. Things look slightly more optimistic for Ford, however, with a slew of new cars that have just been introduced, Healy said.

Ford said it was pleased with the results so far for its new offerings. Sales of the new Mustang rose 12 percent compared to a year ago, while combined sales for the new Ford Five Hundred and Freestyle and the Mercury Montego were up 62 percent compared with October.

George Pipas, Ford's top sales analyst, said based on the momentum of the new products, he expected higher sales in December. November traditionally is a slow month for auto sales, he noted.

``The overall result was not up to par, largely owing to some disappointing performances in the month for carry-over products, including, but not limited to, the Ford Focus in the small-car segment,'' Pipas said in a conference call with investors.

GM spokeswoman Deborah Silverman said November's soft sales were due largely to the fact that the company is at a lull in its introduction of new products.

However, Healy predicted GM would continue to lag until late 2005 or early 2006, when sales should pick up due to new truck launches.

Chrysler credited the Chrysler 300 sedan with helping it generate a surge in showroom traffic. ``The Chrysler 300 has completely sold itself since its introduction,'' said Gary Dilts, Chrysler's senior vice president for sales. ``The excitement and desire this car has generated with customers far exceeded our expectations and is spilling over into our other products and spotlighting our entire product lineup.''