AP
Auto Makers Post Weak Sales in September
Tuesday October 2, 6:22 pm ET
By Dee-Ann Durbin, AP Auto Writer
Auto Sales Weak in September, but GM, Honda and Nissan Buck Trend With Hot-Selling Vehicles


DETROIT (AP) -- Weakness in the housing market and flagging consumer confidence made September another tough month for the auto industry, although General Motors, Honda and Nissan bucked the trend with hot-selling new vehicles, according to U.S. sales figures released Tuesday.

Ford Motor Co.'s U.S. sales plummeted 21 percent for the month, largely due to a 62 percent reduction in sales to rental car companies. Toyota Motor Corp. posted a 4 percent decline but still outpaced Ford for the month and for the January-September period, continuing its drive to replace Ford as the nation's No. 2 automaker in sales after GM. Toyota had sold 28,654 more vehicles than Ford as of the end of September. Chrysler LLC also was down 5 percent for the month.

Overall U.S. sales were down 3 percent from last September, according to Autodata Corp.

General Motors Corp. said sales were flat compared with last September, despite a month of difficult labor negotiations and a two-day strike by the United Auto Workers union. GM produced 30,000 fewer vehicles because of the strike, but the walkout had no impact on sales and GM's production schedule is unchanged, said GM's top sales analyst, Paul Ballew.

Ballew said the Federal Reserve's interest rate cut in the middle of September didn't have an immediate impact on sales but helped calm the market and ensure that the tightening mortgage market won't affect automotive credit.

"For us as an industry, we support and applaud the Fed's move because we cannot have the spillover effects into other categories," Ballew said.

Still, he said high energy prices and a slump in important markets like California and Florida will continue to hurt the industry through the fourth quarter.

Erich Merkle, vice president of auto industry forecasting for consulting company IRN Inc. in Grand Rapids, said it will take months for the rate cut to trickle down to average consumers.

"These are pretty weak numbers and this is indicative of the overall weakness we've seen in the economy," Merkle said.

GM's car sales were down 4 percent while truck sales were up 4 percent on the strength of the Chevrolet Silverado and other new pickups. GM also got a boost from new crossovers like the Buick Enclave and the new Cadillac CTS sedan, which posted a 73 percent sales increase for the month.

Ford's car sales dropped 39 percent compared with last September while its truck sales were down 5 percent. Sales of Ford's F-150 pickup, long the best-selling vehicle in the United States, fell 21 percent as newer pickups from GM and Toyota stole its thunder.

George Pipas, Ford's top sales analyst, said Ford is on track to cut sales to daily rental fleets by more than its original goal of 30 percent this year, or 135,000 vehicles. Ford, GM and Chrysler have been trying to cut back on rental sales, which can hurt brand image and profits.

Pipas said Ford's retail sales -- or sales excluding those to rental and other fleets -- were down 15 percent. That was more bad news for the automaker, which hasn't seen sales rise since October 2006, according to Ward's AutoInfoBank. But Pipas said Ford is meeting its goal of stabilizing U.S. market share, which has held steady at around 13 percent for most of 2007.

Chrysler's car sales shot up 18 percent with the introduction of the newly redesigned Sebring, but its truck sales were down 11 percent despite the heaviest incentive spending on pickups in the industry, according to the auto research site Edmunds.com.

Paul Taylor, chief economist with the National Automobile Dealers Association, said Ford, GM and Chrysler deserve credit for holding the line on fleet sales. Chrysler said its fleet sales were down 20 percent in September, while GM's were down 7 percent. Taylor said the volume won't be missed much, since fleet sales don't help manufacturers or dealers because of their low margins.

Toyota's overall decline compared with September of last year was led by its trucks, which were off 6 percent. Car sales were down 4 percent, the company reported, but it said the figures were compared with a best-ever September 2006.

Toyota spokesman Irv Miller said production of some popular vehicles like the subcompact Yaris hasn't kept up with U.S. demand. But Miller said Toyota believes the market will get stronger toward the end of the year.

"We're confident the next few months will keep us on track to reach our growth targets," he said.

Honda Motor Co.'s U.S. sales rose more than 9 percent, with car sales up 7 percent and truck sales up 13 percent. The new Accord sedan and CR-V crossover vehicle helped fuel the increase, the company said.

Nissan Motor Co.'s sales gained 7 percent on the strength of its redesigned Altima sedan as well as the new Rogue crossover. Nissan's car sales were up 17 percent, while truck sales fell 6 percent.

The Associated Press reports unadjusted figures, calculating the percentage change in the total number of vehicles sold in one month compared with the same month a year earlier. Some automakers report percentages adjusted for sales days. There were 25 sales days last month and 26 in September 2006.

Ford's shares rose 34 cents, or 4.1 percent, to $8.57 Tuesday as investors anticipated a new contract with the UAW that could help Ford. GM shares rose $1, or 2.8 percent, to $37.05.