GM's sales up 36% in Dec.

Ford posts 13% gain, Chrysler at 0.8%

Effect of buyer incentives?

Skeptical Wall Street sells off the auto shares

January 04, 2003|By BLOOMBERG NEWS

DETROIT - General Motors Corp. led an increase among U.S. automakers with its best December sales in 23 years.

Sales last month at the world's largest automaker rose 36 percent to 473,663 cars and trucks. Sales at No. 2 Ford Motor Co. climbed 13 percent to 304,293, and the Chrysler unit of Germany's DaimlerChrysler AG sold 172,494 vehicles for a 0.8 percent gain.

No-interest loans and rebates may have tempted customers to buy earlier than they would have, hurting sales in the current quarter, investors said.

Shares of the three companies fell on concern that the reports foretell a drop in 2003 sales, which could hurt results as GM and Ford face billions of dollars in debt payments. U.S. automakers have relied on the incentives to stimulate sales since the Sept. 11, 2001, terrorist attacks.

"January and potentially February probably will be soft," said Dan Poole, an analyst at National Equity Corp. "I think the consumer has been well trained to wait for the next round of incentives."

Investors also worry that GM and Ford will have to replenish pension funds racked by stock market losses.

Total U.S. auto sales rose 4 percent in December, based on the average forecast of analysts polled by Bloomberg News. Sales were projected to reach an annual rate in December of 16.9 million vehicles, up from 16.5 million in December 2001.

The percentage change in Ford's sales is based on a daily selling rate that adjusts for one less sales day last month than a year earlier. The total rose 8.2 percent without the adjustment, Ford said.

Dealers also increased incentives to attract customers. In some Midwestern states, they offered customers discounted prices at the same levels that employees of automakers receive. Yesterday, GM scaled back some offers, charging interest on all loans for Cadillac models and shortening terms of loans for sport utilities.

Ford stock fell 26 cents to $9.68 on the New York Stock Exchange yesterday. GM's shares declined 41 cents to $38.54, and the U.S.-traded shares of DaimlerChrysler dropped 83 cents to $32.14.

GM's car sales rose 37 percent to 172,135, with the Chevrolet Malibu midsize sedan up 74 percent and sales of the Buick LeSabre large sedan more than doubling. Light-truck sales rose 36 percent to 301,528, including an 87 percent gain for the Chevrolet TrailBlazer midsize sport-utility and 22 percent for the Chevrolet Silverado pickup truck, GM' best selling model.

Ford will raise first-quarter production by 10,000 more vehicles than forecast, to 1.01 million. The company produced 1.05 million cars and trucks in 2002's first quarter.

Sales of F-Series pickup trucks, the best-selling line of vehicles in the United States, dropped 10 percent to 72,884.

Some customers may have held off buying the F-150 model, as rivals have introduced newer pickup models. Ford has redesigned the F-150 for the 2004 model year. Explorer sales rose 30 percent to 38,645, and sales of the Ford Taurus almost doubled.

Chrysler's car sales fell 4.4 percent to 34,273, including a 37 percent decline for the Sebring sedan and an 18 percent drop for the Concorde. The automaker's truck sales rose 2.1 percent, with Jeep sport utilities up 22 percent.

Among European automakers, Bayerische Motoren Werke AG's U.S. sales in December rose 43 percent to 26,252 BMW- and Mini-brand car and trucks. Excluding the new subcompact Mini car, BMW sales climbed 25 percent.

Sales of DaimlerChrysler's Mercedes-Benz luxury cars and sport utilities rose 10 percent to 21,288 in December.

Toyota Motor Corp.'s sales increased 2 percent in December to 141,491 on higher demand for light trucks and higher sales of luxury Lexus division cars and trucks.

Japan's biggest automaker said full-year sales rose to a record 1.76 million vehicles, its seventh consecutive year of U.S. gains.

Sales of Toyota's Lexus division rose sales rose 16 percent, keeping its lead in the luxury segment for the third consecutive year.

Toyota is the No. 4 automaker in the United States.

Nissan Motor Co.'s combined Nissan and Infiniti brand sales fell 2.2 percent to 57,499 in December.

For 2002, Japan's No. 3 automaker raised sales 5.1 percent to 739,525 vehicles, its highest level in more than decade, a spokesman said.

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