US Car Makers Post Lower December 2005 Sales

DETROIT January 4, 2006; Poornima Gupta writing for Reuters reported that U.S. automakers posted lower December sales on Wednesday, capping a tumultuous year in which Detroit's Big Three struggled to come to terms with changing consumer tastes prompted by high gas prices.

In sharp contrast, Japan's Toyota Motor Corp. -- which is poised to unseat General Motors Corp. as the world's largest automaker -- posted an 8.2 percent increase in December sales and grabbed more market share from U.S. automakers last month.

Toyota, including its Lexus and Scion brands, outsold DaimlerChrysler AG's Chrysler in December and its U.S. market share of 13.3 percent last year puts it well within striking distance of Chrysler's 13.6 percent.

General Motors and Ford Motor Co., each facing a deepening financial crisis, said December sales were down 10.2 percent and 8.7 percent, respectively, with steep declines in SUV sales. Demand at the two automakers was down for the year, too.

"It was good year for car sales overall, but GM, Ford suffered particularly because of the collapse of their big SUVs," Burnham Securities analyst Dave Healy said.

"I think you can call Detroit an island surrounded by prosperity," he added

DaimlerChrysler AG said its U.S. sales fell 2 percent last month, with sales at its Chrysler division falling 5 percent. Chrysler was the lone Detroit automaker to see a sales rise of 5 percent for the year.

Given "volatile gas prices," overall auto sales this year are likely to be lower than in 2005, Mark Fields, president of Ford's operations in the Americas, told reporters at the Los Angeles Auto Show on Wednesday.

But GM expects industry sales in 2006 to be about comparable to 2005 with relatively stable pricing and oil prices in the mid- to high-$50 per barrel range, Paul Ballew, GM's executive director of market and industry analysis, said.

Asian brands won a 36.5 percent share of the U.S. market last year, a 1.9 percentage point increase compared with the same period a year ago. U.S. automakers, on the other hand, collectively lost 1.7 points of share at 57 percent, according to industry tracking firm Autodata.

DOWN FOR THE YEAR

Total sales across the industry fell 4.5 percent in December to 1.48 million vehicles, for a seasonally adjusted annual rate of 17.1 million vehicles. That is lower than the 17.9 million rate a year ago, but higher than the 15.7 million rate last month.

For the year, sales totaled about 16.9 million vehicles, making 2005 one of the strongest years for the industry.

Nissan Motor Co. Ltd. said it U.S. sales slipped 1 percent in December even as sales for the full year finished 9.6 percent higher. Sales last month at Honda Motor Co. Ltd. (Tokyo:7267.T - News) fell 3.3 percent, but for 2005 were up 5.2 percent.

Korean automaker Hyundai Motor Co. Ltd.'s sales fell 13.7 percent last month and were down 7.7 percent in 2005.

Meanwhile, Volkswagen said on Wednesday it expects U.S. sales to rise 5 percent to 10 percent this year, boosted by a rejuvenated model lineup, after falling 12 percent in 2005.

Overall, GM sales declined 4 percent in 2005, while Ford sales were down 4.4 percent. In some good news for GM, Chevrolet outsold Ford's namesake brand last year for the first time in 19 years, grabbing the title of top-selling brand in the U.S. market.

The biggest trend in 2005 was a shift toward cars and away from fuel-thirsty SUVs, analysts said.

Both GM and Ford have relied on mid- and full-sized SUVs as profit engines since the late 1990s. But those vehicles, especially from the aging lineups offered by GM and Ford, proved less attractive as gas prices hovered at near-record highs throughout 2005.

Sales of GM's largest SUVs such as the Suburban fell 36 percent in December and were down 27 percent for the year. Sales of Ford's Explorer SUV fell 24 percent last month and 29 percent for the full year.

Ford said sales for its cars rose 2 percent last year, its first car sales increase since 1999. Combined sales for the recently-launched Ford Fusion, Mercury Milan and Lincoln Zephyr sedans in December were 11,808, up 33 percent from November.

"If our market share in this category holds up, it would be the first year since 1993 that we have achieved an increase in car market share," Ford's chief sales analyst George Pipas said.

(Additional reporting for Reuters by David Bailey in Chicago and Kevin Krolicki in Los Angeles)