A weak US light vehicle market in February has prompted GM and Ford to cut North American production. Figures released by Ward’s show US light vehicle sales at 1.17m units in February – some 10.3% under last year’s level on a daily sales rate (DSR) basis that adjusts for year-on-year calendar differences.
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GM said it planned to cut second-quarter production 5%. Ford announced a 10% reduction.
Ford plans to produce 730,000 vehicles in the second quarter of 2008, down from 811,000 vehicles in the same period a year ago, the company said.
Few makers escaped the slump in sales in February.
According to Ward’s data (on a DSR basis) GM sales declined by 16.4% in February, while Ford’s sales were off 11.2%, Chrysler Group’s sales declined by 17.6% and even Toyota’s fell 6.6%.
Analysts said a difficult month was predicted on the back of weak consumer confidence and housing woes.
Mark LaNeve, GM’s vice-president for North American sales, said: “Traffic was soft, business was tough all month.” He added that tightening credit conditions were affecting sales “on the margin”.
GM also said the comparison was with a relatively strong February last year.
Sales of the Chevrolet Silverado pick-up, GM’s top-selling vehicle, slumped by a whopping 28% in February.
Jim Farley, Ford’s marketing chief, said: “The industry as a whole will be under more pricing pressure.” Ford can at least take some solace from pipping Toyota to the number two spot. Ford also said about 60% of its decline came from lower sales to rental companies.
Edmunds.com estimated that carmakers raised incentives by an average 8.4% last month compared to a year earlier.
Jim Press at Chrysler put a brave face on the figures.
“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. “The positive numbers for Dodge cars, the all-new Chrysler Town & Country and the Jeep Patriot prove our renewed focus on consumer feedback, such as the demand for good fuel economy, is resonating — and translating into sales of our New Day Value Packages.”
In addition, Press added: “While becoming a more agile company, we’re developing a more personalized relationship with our customers and strengthening collaboration with our dealer partners. It’s the sum total of their feedback that will guide the evolution of our dynamic product lineup and really make it a New Day — and a new era — at Chrysler LLC.”
Mazda was one of the few brands to report a sales gain in February – up 2.4% on last year according to Ward’s.
“The economic outlook remains in doubt, with increasing crude oil prices, continued consumer uncertainty and further concern in housing causing consumers to think twice before purchasing big-ticket items like a new car,” said Jim O’Sullivan, President and CEO, MNAO. “Mazda sales continue to buck the trend across the industry, though, with our focus on selling the right cars and SUVs at the right price, and through the right dealers.”
