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Chrysler, Ford Sales Hit Brakes

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By TOM KRISHER and DEE-ANN DURBIN, The Associated Press

Published: September 5, 2007

DETROIT - Chrysler LLC, Toyota Motor Corp. and Ford Motor Co. each reported sales declines last month, but General Motors Corp., Nissan Motor Co. and Honda Motor Co. surprised industry analysts Tuesday by showing an increase in a declining U.S. auto market.

Toyota's 2.8 percent sales drop, Ford's 14.4 percent decline and Chrysler's 6.1 percent decrease were symptoms of what analysts said would be a slumping U.S. auto market due to high gasoline prices, rising mortgage payments and turmoil in the financial markets.

Ford's drop allowed Toyota to take the No. 2 slot in U.S. auto sales from Ford for August and for the first eight months of the year.

GM, led by increased pickup sales, showed an increase of 6.1 percent, and Nissan Motor Co. reported its sales increased 6.3 percent for August and Honda Motor Co. reported a 4.7 percent increase.

Ford has blamed declining sales through the year on efforts to wean itself of low-profit sales to rental car companies and other fleet buyers. It also said it had heavy incentives that boosted sales last August.

The auto makers' sales analysts said they were being hit by a declining U.S. economy that has rattled consumers.

'Overall, the industry experienced softer sales in August than a year ago,' Darryl Jackson, vice president of U.S. sales for Chrysler, said in a statement, adding that Chrysler's fleet sales are down more than 20 percent from the same month last year.

Toyota, with 233,471 vehicles sold in August, beat Ford for the month.

The Japanese auto maker sold 1.788 million vehicles during the first eight months of the year, edging Ford, which sold 1.784 million, not including heavy trucks.

Many analysts have predicted that Toyota will overtake Ford for the No. 2 slot for the full year in 2007.

Ford's car sales of 64,864 were off 33.7 percent compared with the same month last year, and light truck sales, at 152,572, dropped 2.3 percent, the company reported.

In August, sales to individual retail customers were down 13 percent, but daily rental sales dropped 44 percent, the company said.

Ford, which is in the middle of a restructuring plan that will close 16 factories by 2012 and usher thousands of hourly workers out the door with early retirement or buyout plans, saw its sales decline slightly more than 12 percent for the first eight months of the year.

The drop could give the company a stronger argument in contract talks with the United Auto Workers to cut what Ford says is about a $25-an-hour labor cost gap with its main Japanese competitors.

Contracts between the UAW and Ford, GM and Chrysler expire Sept. 14.

Overall, GM sold 385,529 light vehicles in August, compared with 363,521 in the same month last year.

GM's car sales dropped 7.8 percent, but its truck sales soared 16.6 percent for the month due in part to increased incentives on new pickup models.

GM sales include Buick, Cadillac, Chevrolet, Hummer, GMC, Pontiac and Saturn, as well as the European Saab brand.

Toyota's car sales were down 6 percent, but its trucks were up 2 percent compared with August of last year.

Its figures include the Lexus brand.

Nissan truck sales, led by the full-sized Titan pickup, rose 4.1 percent compared with August of last year, while its car sales were up 7.9 percent, the company reported.

Its figures include the Infiniti brand.

Nissan sold 95,527 vehicles in August, compared with 89,848 in the same month last year.

Chrysler sold 168,203 vehicles in August, compared with 179,165 during the same month in 2006.

Honda said it sold 158,342 Honda and Acura models, with car sales up 11.7 percent and truck sales down 3.6 percent.

Paul Ballew, GM's executive director of global market and industry analysis, said that despite his company's increase, all automakers are being hit by economic uncertainty. High gasoline prices and declining home values have caused people to delay auto purchases or exit the market altogether, he said.

'The industry is certainly feeling the effect of macroeconomic events,' he said.

Ford said sales of its new crossover vehicles, the Ford Edge and Lincoln MKX, continued to rise in August, with 10,165 Edges and 3,421 MKXs sold. Sales of F-Series pickups, generally the top-selling vehicle in the U.S., were down 9.9 percent.

Ford's two top-selling cars, the mid-sized Fusion and the small Focus, both saw big drops in August, with the Focus down 14.7 percent and the Fusion off 19.1 percent.

The company's sales include the Ford, Lincoln and Mercury brands as well as Volvo, Jaguar and Land Rover.

Ford also said it plans to make 640,000 vehicles in the fourth quarter, up 6 percent from the same quarter of 2006.

Third-quarter production plans also are 640,000 vehicles, the same as previously forecast, Ford said.

In an effort to boost sales this month, Ford announced that it would offer up to $1,000 cash incentives on most 2007 and 2008 models on top of all existing sales and lease offers. The offer runs through Oct. 1.

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