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Market Update : 
U.S. Auto Sales Fall Despite Discounts
Author: Ivaylo Dagnev
123jump.com
Last Update: 6:55 AM EST December 02 2005



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Contrary to the sales drops among American automakers, many imports reported gains for the month. Asian automakers continued their assault on the Big 3 and captured a 39 % share of the U.S. market, just short of October’s record 40 %. The domestic brands saw their collective market share drop to 53 % for November.

 
Car showrooms were avoided by customers in November, despite lower gas prices and deep discounts, handing domestic and foreign automakers a disappointing month.

General Motors, Ford and Chrysler –The Big Three - reported lower November sales on Thursday, and even Toyota, used to double-digit sales growth, only had modest gains.

Sales of sport-utility vehicles dropped again as consumers showed a growing preference for cars and car-based crossover utilities.

A new round of discounts from U.S. automakers introduced in mid-November failed to overcome buyers'' worries about high heating costs and other factors. Automakers said they''re still suffering payback from a summer of popular discounts that allowed customers to snatch up vehicles for the employee price.

The results were considered a positive sign after sales plummeted in October. Stronger sales were expected in December as the industry gets further away from the huge sales surge this summer.

General Motors’s sales dropped 11.3 % last month compared with last November, led by a 16.7 % decrease in sales of trucks and SUVs. Car sales lost 3 %. GM''s sales fell 3 % in the first 11 months of the year. The world''s largest automaker had its highest monthly sales ever in July, so that was bound to affect the rest of the year. In a show of confidence about its new line of SUVs coming this January, GM raised its first-quarter production forecast. GM plans to produce 1.25 million vehicles in North America in the first quarter, up 6 % from a year ago.

Ford Motor was less optimistic, saying it plans to build 850,000 vehicles in North America in the first quarter, down 2.5 % from a year ago. That''s still a higher output than some analysts had forecast. Ford said it will be increasing car production and lowering its output of trucks and SUVs. Ford said sales of its Ford, Lincoln and Mercury brands fell 18 %. Car sales slid 6 % despite strong demand for the company''s new Ford Fusion, Mercury Milan and Lincoln Zephyr sedans and a 46 % increase in sales of the Ford Freestyle crossover. Sales of Ford trucks and sport-utility vehicles dropped 22 %, led by a 52 % decline in sales of the newly redesigned Ford Explorer SUV.

Payback from summer discounts is still having some effect on truck and SUV sales, but a trend toward smaller vehicles also is taking hold.

DaimlerChrysler''s reported a 7 % decline, with a 10 % increase in car sales offset by an 11 % decrease in truck and SUV sales. Chrysler''s sales were up 6.5 % for the year. Chrysler didn''t reveal its production plans.

Toyota''s sales were up 5.5 %.
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