Big 3 report slower sales in October

Analysts predicted gains

GM, DaimlerChrysler, Ford share prices fall

Automakers

November 03, 1999|By BLOOMBERG NEWS

DETROIT -- General Motors Corp., Ford Motor Co. and DaimlerChrysler AG, the Big Three U.S. automakers, all had disappointing car and light-truck sales in October as 2000 models arrived on dealer lots and the supply of discounted 1999s dried up.

GM's sales of North American-built cars and light trucks fell 3.5 percent, missing analysts' average forecast of a 1.5 percent increase. Ford's fell 6.4 percent and DaimlerChrysler's sales, excluding Mercedes-Benz, fell 3.8 percent, both bigger declines than analysts predicted.

"We're just going to have to get used to comparing results with a boffo year-ago," said Alan Baum, an analyst at IRN Inc. DaimlerChrysler and Ford benefited last year, as GM sought to recover from strikes that cut its truck supplies.

Analysts had forecast that industrywide sales would rise 3 percent from October 1998, the smallest rise since June, helped by gains at European and Asian makers.

Still, industrywide sales remain on pace to beat the 1986 record of 16 million, buoyed by an unemployment rate that remains at a 29-year low of 4.2 percent, and the number of weekly paychecks it takes an average U.S. family to pay for a new car or truck is at its lowest level in 19 years, according to Comerica Bank's Auto Affordability Index.

GM shares fell 56.25 cents to $68.3125 on the New York Stock Exchange. Ford lost 25 cents to $54.375. Stuttgart, Germany-based DaimlerChrysler's shares fell 93.75 cents to $75.25.

GM's U.S. sales of North American-built cars and light trucks fell 3.5 percent to 374,886 in October. Domestic car sales fell 14 percent to 185,355, and sales of minivans, sport-utility vehicles and pickups rose 9.2 percent to 189,531. Total sales including imports and heavy trucks fell 3.4 percent to 382,409.

A year ago, GM was still grappling with the aftermath of a 54-day strike that crippled its North American production, and was unable to build enough redesigned full-size pickup trucks to meet demand at the time.

Sales of GM's full-size Chevrolet Silverado pickup rose 33 percent while the GMC Sierra rose 19 percent. Those gains helped offset declining sales of its full-size sport utility vehicles.

Ford's sales of North American-built cars and light trucks fell 6.4 percent to 302,358 in October, more than the average analyst forecast of a 2.6 percent decline. Total sales including Jaguar and Volvo cars and heavy trucks fell 2.7 percent to 316,954.

Ford's car sales were constrained by low inventory as it ramped up production of the new Focus compact car. Its fleet car sales also fell from the year-earlier month because of the timing of the purchases, said Nicholas Lobaccaro, an analyst with Lehman Brothers.

While "some of the current year-to-year weakness in passenger car sales reflects the timing of fleet sales, nonetheless foreign brands' penetration gains are long-standing," said David Healy, an analyst with Burnham Securities.

DaimlerChrysler's sales at the company's Chrysler arm slid to 209,517 vehicles, a bigger decrease than the 2.9 percent decline analysts forecast. Chrysler car sales fell 9.3 percent, while sales of pickups, sport utilities and minivans fell 1.5 percent.

DaimlerChrysler's results did not include the company's Mercedes-Benz luxury division.

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