Post by ScottR@KTP on Mar 2, 2010 18:59:25 GMT -5
Feb. US auto sales plow ahead despite snow, Toyota
AP
FILE - In this July 14, 2009 file photo, a Chevrolet HHR SS sits on display in AP – FILE - In this July 14, 2009 file photo, a Chevrolet HHR SS sits on display in the Renaissance Center …
* Toyota's pain is rivals' sales gain in February Play Video Auto Industry Video:Toyota's pain is rivals' sales gain in February AP
* Small cars star at Geneva car show Play Video Auto Industry Video:Small cars star at Geneva car show Reuters
By DEE-ANN DURBIN and DAN STRUMPF, AP Auto Writers Dee-ann Durbin And Dan Strumpf, Ap Auto Writers – 24 mins ago
DETROIT – Automakers plowed through a snowy February to better-than-expected sales, and new incentives led by beleaguered Toyota will keep the momentum going into spring.
Despite some analysts' predictions of single-digit gains, sales rose 13 percent over last February and all major automakers but Toyota Motor Corp. reported higher U.S. sales. Most took customers from the Japanese automaker, which has been struggling with a series of massive safety recalls. Toyota's U.S. market share fell to 12.8 percent, its lowest level since July 2005, according to Ward's AutoInfoBank.
To win back sales, Toyota said it will offer zero-percent financing on most models this month plus two years of free maintenance to returning customers. General Motors Co. and Chrysler LLC matched the financing deals.
Toyota's U.S. sales fell 9 percent last month, besting some analysts' predictions that its sales would fall by double digits. Meanwhile Ford, GM, Nissan, Honda, Hyundai and BMW all reported double-digit growth compared with February 2009, at the depth of the recession. The gains might have been even higher without the blizzards that paralyzed the East Coast.
Ford's sales shot up 43 percent and the automaker outsold GM for the first time since August 1998, when GM was in the midst of a strike. Ford's gains were led by cars, which rose 54 percent, with sales of the midsize Fusion, a Toyota Camry rival, more the doubling. Those results included Volvo, which Ford is preparing to sell.
Other winners included Kia Motors Corp. and Subaru. Even struggling Chrysler saw a slight increase in sales.
February was the first full month since Toyota suspended sales of eight popular models on Jan. 26. Toyota Vice President Bob Carter said Tuesday that almost all of those vehicle have been repaired and are now on sale. Toyota also has announced temporary production cuts at two U.S. plants.
Carter estimated the sales suspension cost the automaker 18,000 sales in February. Media coverage of the safety lapses also has taken a toll. Toyota officials and federal regulators appeared before House lawmakers last week and were testifying before the Senate Commerce Committee Tuesday.
Carter said Toyota saw very few of its customers defecting to other brands in February, but it did see a drop in new buyers. Meanwhile other automakers said they were seeing increased business because of Toyota's pain.
"We feel we're getting our fair share of the Toyota business," said Susan Docherty, who was head of sales and marketing at GM until Tuesday afternoon, when she was moved into solely a marketing role. GM's sales rose nearly 12 percent.
Honda Motor Co. said sales of the Accord sedan, which competes directly with the Camry, rose 41 percent. Honda's sales climbed 13 percent overall. Hyundai Motor Co. said its sales rose 11 percent, partly because of a 58 percent increase in sales of the Sonata, another Camry competitor.
Most carmakers offered deals to Toyota customers in February. According to the automotive Web site Edmunds.com, incentive spending rose 11 percent from January to $2,588 per vehicle. Toyota's incentive spending rose 26 percent, to $1,833 per vehicle. That was the fourth-highest monthly incentive total for Toyota since Edmunds began tracking data in 2002. While a boon for consumers, incentives eat into automakers' profits and companies have been trying to cut back on them.
Toyota must be worried because it has generally avoided big incentives in the past, said Paul Ballew, vice president of analytics at Nationwide Mutual Insurance and a former GM economist.
"They're jumping into the deep end of the incentive pool," he said.
According to a USA Today/Gallup poll published Tuesday, 31 percent of Americans think it is unsafe to be in a Toyota or Lexus and 55 percent say Toyota didn't respond promptly to safety problems. The poll questioned 2,021 people and had a margin of error of three percentage points.
Even though Toyota's sales dropped, the company did better than many analysts predicted, said Jesse Toprak, vice president of industry trends and analysis at TrueCar.com, an auto pricing site. He suspects incentives aren't the only reason, because they weren't high enough to attract customers worried about safety.
"This tells me that Toyota's brand strength and loyalty was far stronger than most of us thought," he said.
Automakers were expecting to see gains over February 2009, which was one of the weakest months in a very depressed year. Still, winter storms at the beginning and end of the month hurt sales. GM said its sales dropped 22 percent in the Northeast region.
"It's hard to get enthusiastic about going out and looking for a new car when you have to shovel out," said Raymond Ciccolo, president of Village Auto Group, which owns seven franchises in the Boston area.
GM sales analyst Mike DiGiovanni said sales probably would have been 5 percent higher had it not been for snowstorms. That means the gradual economic recovery is continuing despite setbacks in home sales, new home construction and unemployment, he said.
GM's sales of its Buick, Chevrolet, Cadillac and GMC brands climbed 32 percent. GM plans to keep those four brands and is phasing out Pontiac, Saturn and Hummer. It has sold Saab.
Much of GM's sales increase was due to demand for large new wagons such as the Chevrolet Equinox, which jumped 133 percent.
Chrysler, meanwhile, said its February sales rose half a percent, its first year-over-year monthly increase since December of 2007. Chrysler's minivan sales rose, as did sales of its sedans.
Sales to rental car companies and other fleet buyers also were strong. Fleet sales began ratcheting up in January and continued the trend last month, as companies began buying again after cutbacks last year.
Fleet sales generally mean lower profits to automakers than retail sales to individuals, but Toprak said a few months of high fleet sales are needed to make up for last year's slump. Ford said 40 percent of its sales were to fleets, while GM sold 32 percent of its vehicles to fleets. Thirteen percent of Toyota's sales were to fleets.
South Korea's Kia saw U.S. sales rise 9 percent on brisk demand for its Sorento and Soul, a boxy vehicle aimed at city dwellers. Nissan Motor Co. said sales surged 29 percent as Versa subcompact sales doubled. Subaru reported a 38 percent jump.
Automakers are hoping it all adds up to the end of a long winter for the industry. Ford says it plans to increase North American production by 32 percent in the second quarter to 595,000 vehicles. GM didn't reveal its production plans.
"The industry is very much on track for a continued slow but modest recovery," Toyota's Carter said.
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AP Auto Writer Tom Krisher in Detroit contributed to this report. Strumpf reported from New York.