Ford U.S. Auto Sales Drop 1.7%; DaimlerChrysler Rises (Update1)
April 1 (Bloomberg) -- Ford Motor Co., the second-largest U.S. automaker, said its U.S. sales of cars and trucks fell 1.7 percent to 305,172 in March.

The total included an increase of 0.1 percent from a year earlier for cars and a drop of 2.7 percent for trucks, Dearborn, Michigan-based Ford said in a statement on PR Newswire. The figures include import brands and heavy trucks.

Earlier today, DaimlerChrysler AG, the world's fifth-largest automaker, said March U.S. sales of Chrysler and Mercedes-Benz vehicles rose 7.2 percent to 231,140.

U.S. March auto sales probably fell to an annualized rate of 16.6 million cars and trucks in March from 16.8 million a year earlier, led by declines at General Motors Corp. and Ford according to a Bloomberg survey of 28 auto analysts and economists. It would be the third-straight monthly decline and may result in the lowest first-quarter sales volume since 1998.

``People don't feel any sense of urgency because they think the good deals are going to be there whenever they decide to buy,' said Rebecca Lindland, an analyst at Lexington, Massachusetts-based consulting firm Global Insight Inc. ``With gas prices they figure they might as well wait. And winter just keeps going on and on, and that hurts sales, too.'

Gasoline

Rising gasoline prices are prompting U.S. consumers to shift away from the sport-utility vehicles, minivans and trucks that make up more than half of sales at GM and Ford. Asian automakers still sell more cars than trucks in the U.S. Rising crude-oil prices pushed gasoline to a record $2.153 a gallon this week, according to the U.S. Department of Energy.

DaimlerChrysler, which earlier today said it plans to cut 700 jobs and eliminate models, sold 212,978 Chrysler vehicles in March, an increase of 7.6 percent from the same month last year. The company, based in Stuttgart, Germany, said sales of Mercedes-Benz vehicles rose 1.9 percent to 18,162.

DaimlerChrysler has reported rising Chrysler sales for the past 12 months. New models such as the 300 sedan have attracted buyers and allowed the company to boost market share even as GM and Ford lose ground to Toyota Motor Corp. and its foreign rivals.

Chrysler unit Chief Executive Dieter Zetsche said March 9 that sustained gasoline prices higher than $2.20 a gallon might make it difficult for U.S. industry sales to match last year's 16.9 million vehicles. He said he expects Chrysler sales to rise this year as the unit introduces more new models, such as the Dodge Charger sedan and Jeep Commander SUV.

Loss

GM, based in Detroit, expects to record its biggest loss in 13 years in the first quarter, and two ratings companies have cut its debt to one level above non-investment grade. Rising debt costs and burgeoning health-care expenses have also helped to cut the company's profit forecast for 2005 almost in half.

Sales of the largest trucks, such as GM's Chevrolet Suburban and Ford Expedition SUVs, fell last year and declined the first two months of this year.

Shares of GM and Ford have fallen more than 20 percent this year as sales have declined. Both companies lost auto market share in the first two months of the year and cut their production forecasts for the first half of 2005.

Automakers are trying to boost sales at a time when car buyers are becoming more reluctant to spend. U.S. consumer confidence fell in March for a second-straight month to 102.4 from a revised 104.4 in February as the rise in gasoline prices took more money out of Americans' wallets, the Conference Board said yesterday.

Falling Sales

In the first two months of the year, U.S. auto sales fell 3.6 percent, according to Autodata Corp. GM's U.S. market share fell to 24.9 percent, its lowest sustained share since 1925, while Ford's share fell to 18.2 percent from 19 percent a year earlier. Asian automakers' share of the market rose to 36.2 percent from 34.8 percent.

Adjusted for inflation, current gasoline prices still trail the record $3.085, based on 2005 dollars, hit in March 1981, according to the Energy Department.

GM on March 10 added rebates of $1,000 on models sitting unsold at dealers more than four months. Dearborn, Michigan-based Ford in October introduced the redesigned Mustang, the Five Hundred and the Mercury Montego sedan, and has said the new vehicles are gaining sales.

Incentives

Industry incentives fell 1 percent to $4,377 this month as four of the six largest automakers in the U.S. cut back on overall spending on rebates and lower-interest loans, according to Bandon, Oregon-based CNW Marketing Research.

GM rebates fell 1 percent to $5,298, and Ford's spending dipped 1.7 percent to $5,317, CNW said. Chrysler's expenditures declined 3.8 percent to $4,707 and Toyota incentives fell 3.1 percent to $3,149, according to CNW. Automakers do not report their incentive spending.

Rebates rose 1.1 percent at Honda Motor Co. to $2,976 and 3.3 percent to $2,311 at Nissan Motor Corp., which said yesterday it sold 1 million units in the U.S. in the course of a fiscal year for the first time.