Posted on 12/01/2005 2:13:16 PM PST by Flavius
DETROIT (Reuters) - Detroit's Big Three automakers said on Thursday that U.S. sales slid in November as demand for sport utility vehicles declined further, while sales at two Japanese rivals edged higher.
General Motors Corp., the world's largest automaker, posted an 11-percent decline in November U.S. sales while Ford Motor Co. said sales fell 18 percent.
"I think Ford saw catastrophic declines in big SUVs due to a general retreat from that sector because of gasoline prices," Burnham Securities analyst David Healy said.
GM and Ford both cut fourth quarter production forecasts, but GM said it would raise its first quarter production target 6 percent higher than year-ago levels. Ford said it would cut first-quarter production by 2.5 percent.
Shares of GM rose 3 percent after the announcement.
Production levels are closely-watched because U.S automakers book profits on vehicles when they are shipped from assembly plants, not when they are sold at dealer lots.
DaimlerChrysler AG's Chrysler Group said U.S. November sales fell 7 percent, ending 19 consecutive months of year-over-year gains.
Asian brands won a record 40 percent share of the U.S. market in October, and on Thursday Japan's Toyota Motor Corp. and Honda Motor Co. Ltd. posted monthly sales gains for November of 5.6 percent and 6.4 percent, respectively.
Nissan Motor Co. Ltd. said its U.S. sales slipped 7.8 percent, its second consecutive monthly decline.
GM plans to produce 1.28 million vehicles in the fourth quarter of 2005 and 1.25 million vehicles in the first quarter of 2006, up from 1.18 million units a year earlier.
Last week GM said it would cut 30,000 jobs and close a dozen plants in the United States and Canada.
Ford cut its fourth-quarter production target by 20,000 units to 790,000 vehicles. For the first quarter of 2006, Ford plans to build 885,000 vehicles, down from the 908,000 units it produced a year earlier.
INCENTIVES AND MORE INCENTIVES
November U.S. sales results were more bad news for U.S. automakers, which are dealing with high labor and health-care costs, rising prices for transportation and raw materials and intense competition from Asian companies.
Analysts have said that highly publicized summer incentives, including discounts used to clear out 2005 models, pulled many potential buyers into the market earlier than they might have been otherwise, creating a "pull-ahead" effect that left the following months with slower sales.
Some analysts said last week that November got off to a slow start and predicted that Detroit's long-running price war, which has eroded profits, would heat up in coming weeks. In mid-November, the domestic automakers sweetened consumer incentives to attract shoppers.
GM earlier this month launched a "Red Tag" sale, in which anyone in the United States could buy a vehicle for the price paid by its auto parts suppliers' employees. Combined with existing rebates, the program offered a discount of more than $10,000 on some of GM's largest SUVs, a greater savings than the automaker's summer sales incentives.
Chrysler offered customers two years of free gasoline, worth close to $2,400 each. Ford responded with a program offering reduced prices and rebates.
But incentives may not counteract uncertainty over jobs and the economy, which some analysts have said may also be dragging sales down. And a recent easing of gasoline prices has not reversed a shift in U.S. consumer sentiment away from fuel-thirsty SUVs and pickups.
Truck sales at Ford fell nearly 18 percent, with some of its largest SUVs such as the Expedition falling nearly 44 percent in November. Sales of Ford's popular Explorer model plunged 52 percent.
Analysts expect overall vehicle sales to come in at a seasonally adjusted annual rate of about 15.7 million in November. Last year, the U.S. vehicle sales rate in November was 16.6 million.
Vehicle sales across the industry slumped to a seasonally adjusted annual rate of 14.7 million units in October, their slowest pace in seven years.
Shares of GM rose 71 cents, or 3.2 percent, to close at $22.61 on the New York Stock Exchange, while shares of Ford fell 10 cents, or less than 1 percent, to $8.10. Shares of DaimlerChrysler rose 69 cents, or 1.4 percent, to $50.98.
(Additional reporting by Poornima Gupta)
The Unions are a big if not the biggest problem facing the US car manufacturers. The socialist unions must be crushed, period.
I have three words for U.S. automakers:
fuel economy (people really do care),
quality (people really do care),
endurance (people really do care).
Supply and Demand folks.
The big three have excess production capacity that they are only now starting to cut back on (excessive supply), and consumers don't seem to want what the big three are making, with the exception of a few models for each company (limited demand).
Solution, make a product people want to buy because of what it is and not because of an "incentive", and, always produce one call less then what can be sold.
Best Regards
Sergio
All of those are available in American cars now. I recently bought 2 new cars. After all the reasearch and comparisons, I ended up with two American cars, both GM. When I started researching, I was sure I would be buying foreign but it didn't work out that way. Fuel economy, price, quality, features and styling were my main factors. The wife got a new Saturn Ion which she likes very much and I selected the new Pontiac G6 GTP Coupe.
I didn't start out planning to buy American but that's where my research took me.
Let me know how it turns out. My Toyotas have all gone over 200,000 miles without any major trouble. My last Chevy ('96 Cavalier) lasted 110,000 and blew a motor. Maybe these are just anecdotes that belie no trend, but I have had very good luck with Toyota(the two we are now driving are my fifth and sixth).
Nice machine!
I bought a C6 Vette a few months back so I also have a new car. :-)
As far as I'm concerned, Toyota is top of the game as far as quality goes. I was looking hard at the Solara but the V6 didn't come with a manual transmission, both of which I wanted. The big four Japanese manufacturers have really established themselves as a result of their quality and American are playing catch up, IMO.
In the '80 American cars just pretty much sucked. In the 90's they seemed to get better but still had some quality issues. I traded my '99 Ranger and it was still running perfect at 115,00 with no trips to Ford. I believe this decade they should be putting out some decent vehicles. I'm sure hoping so since we bought two of 'em. ;)
"I bought a C6 Vette a few months back so I also have a new car. :-)"
SWEET! I was looking at a GTO at the dealership but that gas milage held me back. Well, actually my wife did but that's another thread. :) Enjoy your new 'Vette!
My 1993 Nissan, Altima had 310,000 km's before she hit the dust. And it wasn't because of her engine.....it was because of suspension problems that I couldn't afford to fix!! I would probably be still driving her, if I had the money for repairs.;o(
My son just traded in a 96 Chevy Lumina with 174,000 miles.
He never did anything to the engine or transmission except regular oil and fluid changes. One tune up at 100,000.
LOL! Nope. :-) Kick to drive as well.
Thanks. :-)
Got every option as well.
91 F150
Bought it used at 137,00 now 240,000 miles with the original engine still going strong.
2 Alternators
1 Water Pump
1 Starter
1 Master Cylinder
1 Heater Core
All replaced by me thanks to the good folks at Chilton.
I'll pass on the $400-500 per month car payments.....
Not at all, thanks for the correction.
Best Regards
Sergio
I traded for a '98 Mustang that has not given my any significant problems.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.