Ford, Chrysler post lower US sales in December

"Business"

01/04/2006

Wednesday January 4, 1:36 PM EST
By Poornima Gupta

DETROIT (Reuters) - Weaker U.S. auto sales figures for December released on Wednesday capped a tumultuous year where Ford and Chrysler struggled with high gas prices and changing consumer tastes.

Ford Motor Co., (F) which has been struggling to return its North American automotive unit to profitability, said its sales were down nearly 9 percent in December with steep declines in SUV sales.

Overall, the No. 2 U.S. automaker’s sales declined 4.4 percent in 2005. Ford’s only two months of sales gain were in July and August, when it followed GM’s lead by offering the public new vehicles at the same low prices its employees pay. Sales retrenched heavily in the following months.

DaimlerChrysler AG said its U.S. sales fell 2 percent last month with sales at its U.S.-based Chrysler unit falling 5 percent.

The decline and an expected drop in December sales at larger rival General Motors Corp. (GM), which may soon be unseated as the world’s largest automaker by Japan’s Toyota Motor Corp. , caps a dismal year for U.S. automakers as they lost market share to their Asian rivals.

Nissan Motor Co. Ltd. said it U.S. sales slipped 1 percent. But analysts expect Toyota to post yet another sales gain in December.

Asian brands won a 36.5 percent share of the U.S. market through November of last year, a 1.9 percentage point increase as compared to the same period a year ago. U.S. automakers, on the other hand, lost 1.7 points of share, according to industry tracking firm Autodata.

Overall, analysts are forecasting December sales for the industry will drop to a seasonally adjusted annual rate in the range of 16.7 million to 17.2 million vehicles, lower than the 17.9 million rate a year ago, but higher than the 15.7 million rate last month.

The biggest trend in 2005 was a shift toward cars and away from fuel-thirsty SUVs, analysts said.

Both GM and Ford have relied on mid- and full-sized SUVs as profit engines since the late 1990s. But those vehicles, especially from the aging lineups offered by GM and Ford, have become less attractive as gas prices hovered at near-record highs throughout 2005.

Ford said sales for its cars rose 2 percent last year, its first car sales increase since 1999. Combined sales for the new Ford Fusion, Mercury Milan and Lincoln Zephyr sedans in December were 11,808, up 33 percent from November. The cars were introduced in October.

“Consumer response to our new mid-size sedans has exceeded our expectations,” Steve Lyons, Ford’s North American sales and marketing chief, said in a statement.

Ford’s best-selling F-Series pickup trucks posted a 6 percent drop in sales compared with December 2004, while results for the Ford Explorer SUV fell 24 percent.