U.S. vehicle sales decline 1 percent

Posted 7:43AM on Wednesday 3rd April 2002 ( 23 years ago )

DETROIT - U.S. vehicle sales fell a mild 1 percent last month compared with March 2001, offering encouragement to analysts and automakers that demand will strengthen and the nation's economy will continue to improve. Sales of passenger cars fell 2 percent compared with the same month a year ago, while light truck sales slipped 1 percent, the industry reported Tuesday. Several automakers say strength in sales to retail customers helped their results. "The month was better than most forecasts and better than Detroit was expecting," said David Healy, an analyst with Burnham Securities. "That means that production will probably increase in the second quarter." The Big Three's overall sales were down 6 percent compared with March 2001. Much of that decline was blamed on lower fleet sales to rental car companies and others in the wake of the Sept. 11 terrorist attacks. But even that effect is starting to fade. Meanwhile, sales by European and Asian companies rose 12 percent and 6 percent, respectively, in March. The performance rounded out a quarter that six months ago many thought would be utterly dismal, noted Paul Ballew, the top sales analyst for General Motors Corp. For the first three months of 2002, sales of his company's vehicles were down 4.2 percent from the first quarter of 2001, with car sales 21.7 percent lower but truck sales up 13.6 percent. "If we see greater improvement in terms of direction of the economy and that coupled with the aggressiveness of pricing, it would not surprise us to see an industry maintain the pace that we've seen in the first quarter," Ballew said. Overall, U.S. sales were down 3 percent compared with the first three months of 2001. While the Big Three reported an overall decline of 8 percent for the first quarter, European companies saw a gain of 10 percent and Asian firms reported sales up 4 percent. Sales for GM, the world's largest automaker, slipped 1.7 percent last month compared with March 2001. Light truck sales increased 8.7 percent in March over the same month a year ago, while passenger car sales declined 12.9 percent. The company's Saab unit reported sales surged 59.1 percent over March of last year. The Chrysler Group of DaimlerChrysler AG saw a 3.8 percent decline in U.S. car and truck sales last month compared with March 2001. Passenger car sales slipped 0.5 percent from a year ago, while truck sales fell 5 percent. In the first three months of the year, Chrysler's sales fell 8 percent, with car sales down 11.6 percent and truck sales down 6.6 percent. "We are on plan, on target in all dimensions," said Gary Dilts, the company's senior vice president of sales. "We've hit our retail targets here. We're also seeing some share gains, month over month, across the board." Most of the Big Three's decline came on the back of Ford Motor Co., which saw March sales down 12.6 percent from a year ago. Sales of Ford, Lincoln and Mercury cars were 12.7 percent lower than March 2001, and light truck sales decreased 12.5 percent. "GM's numbers were quite good, as I expected. Chrysler's were better than I expected," Healy said. "But Ford was little disappointing." For the first quarter of 2002, sales of Ford vehicles fell 13.1 percent from the same period last year, with cars down 19.6 percent and light trucks - including pickups, sport utility vehicles, vans and minivans - down 9.2 percent. But Ford, like some of the other automakers, saw hope that fleet sales, which have been down since October, will finally stabilize - if not improve - in the coming months. "It's a period that will end at some point," said George Pipas, sales and marketing analyst for Ford. "We do expect fleet sales to begin to flatten out in the second half of the year." The automaker's Volvo unit saw sales drop 19.1 percent compared with March 2001. But Ford's Jaguar and Land Rover units reported record sales during March, with increases of 86.9 percent and 36.6 percent, respectively. The percentages are based on the daily sales rate; there were 26 sales days last month and 27 in March 2001. The first quarter of this year also had one less sales day than the 77 in the first three months of 2001. Among other automakers, BMW of North America LLC reported its best March ever. Sales of its cars and trucks rose 23.1 percent compared with March 2001. That includes 787 of its MINI brand vehicles, which went on sale March 22 in the United States for the first time in 35 years. Among Japan's top auto companies, Toyota Motor Corp.'s March sales rose 4.2 percent, while American Honda Motor Co. reported a 2.3 percent increase, and Nissan Motors Corp., with its popular redesigned Altima, showed a 14.4 percent improvement from the same month in 2001. Mitsubishi Motors Corp. reported solid March and first-quarter sales, up 22.8 and 24.6 percent, respectively. It sold more than 7,000 of its Lancer sedans, the second best month for the car since it made its debut last summer. "Our extraordinary momentum justifies our very optimistic outlook for 2002," said Pierre Gagnon, the company's president and chief operating officer. Hyundai, South Korea's largest carmaker, reported a sales increase of 19.2 percent for the month and up 18.5 percent compared with the first quarter of 2001. Earlier Tuesday, Hyundai announced plans move more aggressively into the U.S. market, building a $1 billion plant in Alabama to produce 300,000 cars annually. Mitsubishi Motors Corp.

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