U.S. consumers shied away from auto dealerships in February amid rising economic uncertainty which cut deeply into the sales of both the Big Three U.S. automakers and popular Japanese rival Toyota. Those who did make it into the showroom often sought more fuel-efficient options as sales continued to shift away from trucks and large sport-utility vehicles, giving Japan's Honda Motors an edge with its fleet of fuel-sipping cars.
Honda posted record February sales of 115,397 vehicles Monday, a 0.7% increase over last year. Toyota, which posted 12 straight years of record sales growth in the U.S., has now recorded three straight months of losses as sales fell 6.6% to 182,169 vehicles in February as it failed to maintain momentum. Toyota, which overtook Ford Motor Co. last year for the number two spot in the U.S. market, slipped back behind Ford in February even as the Detroit group reported a decline of 6.9% to 196,681 vehicles.
The losses were felt across all Ford brands and Ford announced plans to trim production by 10% in the second quarter to 730,000 vehicles and cut 2,500 jobs at three U..S plants as it expands a massive restructuring plan. "We remain focused on our plan to return the North American automotive business to profitability," Mark Fields, Ford's president of the Americas said.
General Motors reported a 13% drop in sales to 270,423 vehicles amid "tough market conditions." Mark LaNeve, vice president for GM North America, said despite the decline, GM is expected to hold its retail share for the first two months of 2008. "Most importantly, despite tough market conditions, we anticipate our total retail vehicle sales share to have remained flat for the first two months of the year compared to 2007," he said. "We are encouraged by our performance in the key passenger car categories, and while the overall market for trucks is challenging, we anticipate holding our share for full-size pickups and utilities."
Chrysler LLC also posted significant losses as sales fell 14% to 150,093 vehicles. The number three U.S. car-maker, which was bought by private equity investors last year, attributed the decline to weak economic conditions along with planned cuts in low-margin sales fleet sales. "While the auto industry is experiencing the impact of slow economic growth, Chrysler LLC February results reflect progress within each brand," vice chairman and president Jim Press said. "While becoming a more agile company, we're developing a more personalized relationship with our customers and strengthening collaboration with our dealer partners," he said.
While demand is expected to pick up later in the year, the shift away from high-margin trucks and sport-utility vehicles will continue to hit the bottom lines of U.S. automakers."They're trying to rebalance their product mix to reflect these changed consumer preferences but it takes time and manufacturers who are more flexible tend to do well in these conditions and that generally favors the Japanese automakers," Jesse Toprak, an analyst at Edmunds.com said.
Total light auto sales fell an adjusted 7.3% to 1.18 million vehicles for a seasonally-adjusted annualized rate of 15.38 million units in February, according to Autodata. That was up slightly from a rate of 15.24 million units in January but off significantly from the seasonally-adjusted annualized rate of 16.56 million units in February 2007.
Copyright Agence France-Presse, 2008