As usual, car sales were cold in Jan.

Light-truck business is even slower after after a strong December

February 02, 2005|By KNIGHT RIDDER/TRIBUNE

DETROIT - Depending upon whom you talk to, auto sales in January were a flop or just shoulder-shrugging OK.

In either case, it wasn't a sizzling start to the new year.

January is typically the worst month for selling new cars and trucks in the United States, largely because it is cold in most of the country and many customers would rather be nestling indoors than braving frosty dealer lots.

What's more, December is always a tough act to follow. Automakers typically roll out such blowout year-end deals that they pull many customers into the market early.

This January followed one of the best Decembers on record, so auto sales last month did not fail to disappoint. Automakers sold fewer than 1.1 million vehicles in the United States last month, 5.3 percent fewer than in January last year. Car sales declined 2.2 percent, while light-truck sales fell 7.7 percent. Truck sales have been outperforming car sales in recent years.

GM down 6.7%

Compared with year-ago levels, sales were down 6.7 percent at General Motors Corp. and 12.5 percent at Ford Motor Co. DaimlerChrysler AG sales fell 1.2 percent, largely in the Mercedes-Benz division, where they fell 20.1 percent. Chrysler Group, which sells Chrysler, Dodge and Jeep vehicles, was up 0.8 percent.

The Japanese Big Three reported mixed results. Honda Motor Co. sales were down 9.6 percent for the month, and Toyota Motor Corp. sales were off 1.9 percent. Nissan Motor Co.'s results climbed 6.1 percent in the tough market.

Also bucking the downward trend: BMW, up 23 percent in the United States, and Hyundai Motor Co., up 9.6 percent.

Paul Ballew, GM's executive director of global market and industry analysis, reminded reporters and analysts in conference calls yesterday: "It's January, and I caution everybody that it is January, we're really not that far off from what we expected."

But the lackluster results - and ever-rising incentive levels - caused one analyst, John Casesa at Merrill Lynch & Co. Inc., to ask: "Is this even worse than the normal January?"

At first glance, it was difficult to tell.

When it released its sales results, GM also noted that it would cut production by another 25,000 cars and trucks, to 1.225 million vehicles during the first quarter, an overall reduction of 8.9 percent from last year.

More incentives

And, even though GM ended the month with about the same stock as last year (1.23 million vehicles), the world's largest automaker also announced a round of new incentives. GM added back cash on some new models, such as $1,000 on the Pontiac G6, and customers can get as much as $4,500 off some trucks.

That seemed to suggest tough times.

But there were 24 selling days in January - two fewer than last year. Several automakers complained that the difference made their performance look worse than it actually was.

Some automakers and auto analysts do not report sales results adjusted for selling days because dealerships across the country sell vehicles on different days of the week and might not always take the same days off. But GM, which adjusts its sales reports for the number of selling days, insists that its way is the most appropriate for analyzing monthly performance. On an adjusted basis, GM's sales were up 1 percent.

Auto analyst Art Spinella, president of CNW Marketing Research in Bandon, Ore., characterized January as a "yawner" but not all that bad after a strong December.

Spinella still expects industry sales this year to top 17 million vehicles. That's slightly better than last year, when about 16.9 million vehicles were sold.

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