GM had the lowest incentives of the domestic makers.




05-02-06 04:22 PM EST

SAN FRANCISCO (MarketWatch) -- General Motors Corp. and Ford Motor Co. continued to lose traction in April, reporting overall vehicle sales Tuesday that showed they'd given up more market share to overseas rivals despite glimmers of sales improvement among Ford's passenger cars and GM's trucks.

With gasoline prices bumping up against record highs in much of the country, fuel efficiency was again at the fore -- a factor that works against U.S. automobile manufacturers' heavy dependence on bigger vehicles for higher profits.

Ford (F) , catching consumers' growing concerns, trumpeted fuel economy for an April jump in car sales. But a steep retreat in truck sales led to a 7% overall decline from a year ago.

The opposite was true for General Motors (GM) , which posted an 18% fall in car sales and a 2% increase on the truck side; both numbers were adjusted for the fact that dealerships were open one less day this April than in 2005. On a straight month-to-month comparison, however, GM's truck sales fell to 210,801 vehicles from 215,321 a year ago.

Overall, GM's April sales fell 7% on an adjusted basis from a year ago. On a net basis, the Detroit giant's sales fell almost 11%.

Like Ford, DaimlerChrysler (DCX) focused on its gas-friendly models, reporting a 6% retreat to 211,365 vehicles, while Japanese manufacturers continued to gather momentum: Both Toyota and Honda posted better numbers.

Ford and DaimlerChrysler reported unadjusted results, while GM and the Japanese automakers adjusted their percentages to reflect the selling-day rate.

Early on, the industry figure was tracking to come in below Wall Street targets. Analysts polled by Thomson First Call forecast the overall sales rate, known as the SAAR, to come in at 16.6 million vehicles -- down from 17.2 million a year ago, but up fractionally from March.

Ford trucks plunge

Dearborn, Mich.-based Ford said it sold 262,722 cars and trucks in April, with the Fusion, Mercury Milan and Lincoln Zephyr sedans as well as the crossover Ford Escape and Freestyle models posting gains as consumers moved away from the manufacturer's more gas-thirsty vehicles. Car sales overall rose 8.3% to 105,655 while trucks fell 14.5% to 157,067.

"These new, fuel-efficient cars are helping our dealers to retain owners and capture new ones," said Al Giombetti, head of Ford and Lincoln Mercury sales. "We never have been in a better position to compete for customers in an environment of rising gasoline prices."

'We never have been in a better position to compete for customers in an environment of rising gasoline prices.'

Al Giombetti, Ford

On the downside, Ford's Explorer sales plunged 42%, and its Expedition sold 33% fewer vehicles. Even the F-Series truck, Ford's best-selling vehicle, saw sales fall 9% to 64,749 units.

The company said April was the best month on record for its Ford Escape and Mercury Mariner hybrids, with sales more than doubling sequentially to 3,420 vehicles from 1,590 in March.

Ford reiterated its goal of producing up to 250,000 hybrids a year globally by 2010 and backed its commitment to offer hybrid technology in at least eight vehicles, including the Ford Escape, Fusion, Five Hundred, and Edge; the Mercury Mariner, Milan, Montego; and the Lincoln MKX.

Shares of Ford closed flat at $6.91.

GM trucks buck trend

While Ford trucks came under heavy pressure from soaring fuel costs, GM's trucks held strong, thanks to demand for its all-new GMT900 SUV and pickup line.

On an adjusted basis, Chevy Tahoe sales rose 35%, GMC Yukon jumped 36%, and Escalade sales more than doubled from a year ago.

"We know that fuel economy is an important issue for consumers, and every tenth-of-a-gallon improvement counts," said Mark LaNeve, head of GM's North America sales. "We worked hard during the development of our new large utilities to squeeze out every possible ounce of fuel savings, and the result was the best fuel economy in the segment."

GM didn't change its second-quarter production plans in North America but said it now sees production of 502,000 vehicles in Europe, up 12,000 units from last month's outlook. For the Asia Pacific region, GM now sees production of 504,000 vehicles, up 30,000 units from the previous outlook.

GM's stock added 2.5% to close at $23.21.

Trucks pace Honda, Toyota

Honda Motor (HMC) handed in a 6.5% jump in April U.S. sales to 139,124 vehicles, with the car side gaining 4.7% to 82,372 vehicles and the truck sides up 9.3% to 56,752 vehicles.

And in what quickly became a trend in the early sales reports, Honda pointed to gas prices as one of the driving factors in the company's strong truck sales.

"Honda light trucks are some of the most fuel-efficient in their segments, and that is definitely something customers are responding to in this time of rising fuel prices," said Dick Colliver, head of American Honda. "We're not seeing a shift away from light trucks right now, but we are seeing customers make purchase decisions based on fuel economy."

'Record oil prices have a way of reminding us how close to the cliff we're living.'

Jim Press, Toyota

The Honda Ridgeline pickup posted a 43.6% surge to 4,652 trucks while the CR-V, Odyssey and Pilot all notched gains as well.

More of the same came from Toyota (TM) , which reported an 8.5% run-up to 219,965 vehicles, with Toyota trucks increasing 15.6% to 80,616 units. The RAV4 crossover doubled its sales to 13,854 vehicles and the 4Runner gained 14.7% to 9,406.

On the car side, the Corolla and Camry paced the advance, with the new Camry Hybrid hitting the showrooms in the last week of April. Total car sales, including Lexus, rose 6.8% to 127,974 vehicles.

"The market for lower-priced, higher-mileage vehicles is showing strength, as are hybrids," said Jim Press, president of Toyota Motor Sales. "Record oil prices have a way of reminding us how close to the cliff we're living."

As for Nissan Motors (NSANY) , sales fell 1.7% in April, to 86,720 from 91,621. Sales figures were adjusted to account for one less selling day than a year ago. The number of cars sold was down 3.5%, to 47,542 vs. 51,153 in the same month last year, while truck sales were up 0.5% on an adjusted basis to 39,179.

Sales in the Nissan division were up 0.1% while Infiniti division sales dropped 14.2%, the automaker said

Toyota and Honda saw their shares rise 3.1% and 3.6%, respectively, while Nissan tacked on 1.6% to $26.73.

Mercedes doubles

Mercedes-Benz, the high-end side of DaimlerChrysler's business, turned in a 13% rise to 21,270 vehicles, with the truck side more than doubling. Bolstering the car side, the S-Class sedan and the SL550 Coupe enjoyed a strong month, the company said.

Chrysler-brand cars and trucks fell 8% to 190,095 vehicles, in the midst of the German-American manufacturer's plans for "the most aggressive product launch" ever, with 10 new vehicles hitting show rooms this year, including the 2007 Dodge Caliber.

DaimlerChrysler closed down less than 1% at $54.41 as the lone decliner among the major carmakers.

Incentives decline

Automobile makers tightened their purse strings last month, with the average incentive offered per vehicle coming in at $2,368, down 6% from March and off 3% from April 2005, according to Edmunds.com.

U.S. manufacturers accounted for 70% of the total industry figure, with Chrysler offering the most at $3,675 per vehicle, down $364 from last month. Last year, domestic manufacturers comprised 77% of the overall amount.

Ford increased its incentive spending by just $6, to $3,264, while General Motors -- true to its plans to move more toward value pricing -- cut spending $192 to $2,545 per vehicle.

Again, it was the big sport-utility vehicles that carried the most cash on the hood, with an average of $4,925 per vehicle. That's a trend Edmunds.com analyst Jane Liu said she sees continuing through the summer.

"We anticipate that large SUVs and trucks will need increasingly more generous incentives as gas prices inevitably continue their seasonal climb," she said.

 

Toyota, including Lexus and Scion, has moved into 3rd in US sales, surpassing Chrysler with 14.2% of market share.

 

What's the big deal? Toyota is as American as apple pie and cricket.

 

I suspect at this point, the average Toyota purchase does just as much good as the average purchase of Made in Mexico/Germany half-German owned DC products...