Friday, December 02, 2005

Big three sales drop, Honda and Toyota up

Bidness: One of the worst moves in hindsight that Ford/GM did was the employee discount program. It devalued the cars name brand and now customers are waiting around for more discounts which contributes to more losses anyway.

DETROIT - Detroit's Big Three automakers all posted a slide in U.S. vehicle sales in November, losing further market share to major Japanese rivals. General Motors Corp., the world's largest automaker, on Thursday posted an 11-percent drop in November U.S. sales, its fourth consecutive monthly decline. Ford Motor Co. said sales fell for the third straight month, down 18 percent. "I think Ford saw catastrophic declines in big SUVs due to a general retreat from that sector because of gasoline prices," Burnham Securities analyst David Healy said. Both automakers launched new incentive plans in mid-November as demand for their big sport utility vehicles continued to slump. GM and Ford both cut fourth-quarter production forecasts, but GM said it would raise its first-quarter production target by 6 percent compared with year-ago levels. Ford said it would cut first-quarter production by 2.5 percent. Shares of GM rose 3 percent after the company's announcement. Production levels are closely-watched because U.S. automakers book profits on vehicles when they are shipped from assembly plants, not when they are sold at dealer lots. DaimlerChrysler AG's Chrysler Group said U.S. November sales fell 7 percent, ending 19 consecutive months of year-over-year gains. In contrast, Japan's Toyota Motor Corp. and Honda Motor Co. Ltd. posted monthly sales gains for November of 5.6 percent and 6.4 percent, respectively. Nissan Motor Co. Ltd. said U.S. sales slipped 7.8 percent, its second consecutive monthly decline ....Analysts have said that highly publicized summer incentives by the domestic automakers, including discounts used to clear out 2005 models, pulled many potential buyers into the market earlier than they might have been otherwise, creating a "pull-ahead" effect that caused slower sales in later months. Some analysts said last week that November got off to a slow start and predicted that Detroit's long-running price war, which has eroded profits, would heat up in coming weeks. In mid-November, the domestic automakers sweetened consumer incentives to attract shoppers.

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