After posting disappointing sales in November, Ford Motor Co. and General Motors Corp. announced first-quarter production cuts yesterday.
GM's sales declined nearly 17 percent to 300,000 vehicles last month. The largest automaker said it would trim production 7 percent in the first quarter, to 1.25 million cars and light trucks.
GM will close five plants for at least a week in early January, including four truck plants, and GM market analyst Paul Ballew hinted more temporary closings could follow.
"We're still trying to get our arms fully around our first-quarter plan," Ballew said. "This is just our current estimate."
Ford's sales fell 7.4 percent, the sixth straight month of year-to-year decline. The No. 2 manufacturer said it would build 930,000 vehicles in the first quarter of 2005, 8 percent less than this year.
Ford attributed most of the 78,000-vehicle reduction to the closing of a plant in Edison, N.J., this year that built the Ranger compact pickup and a previously announced elimination of one shift at the St. Louis plant that builds the Ford Explorer.
Peter Langlois, an analyst with Ernst & Young, said the production cuts are a tacit admission that GM and Ford were building more cars than they could sell even with hefty incentives.
"It almost sounds like they're conceding more market share losses next year," Langlois said.
By contrast, strong sales of new models such as the Chrysler 300 and Dodge Durango lifted sales 4.5 percent at the Chrysler Group, the U.S. unit of DaimlerChrysler AG.
For the year, Chrysler's sales are up 3 percent to 2 million vehicles, Ford's are down 5 percent to 3 million. GM is off 1 percent to 4.2 million.
Results were mixed for the industry. Nissan North America led major manufacturers with a 26 percent increase to 80,376 vehicles, and Toyota Motor Sales U.S.A. was up 4 percent.
American Honda was down 1 percent, and BMW fell 4 percent.
Double-digit swings in monthly sales are common in the industry, but GM's sales last month were its lowest since January, the worst month for new vehicle sales.
Langlois said GM's full-size SUVs, such as the Chevrolet Suburban and Tahoe and GMC Yukon, are near the end of their product cycle and losing favor with buyers. Sales of those models were down 32 percent.
"It's their big trucks," he said. "They're being superseded by the newer products out there."
