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FEBRUARY CAR SALES; Ford Tops GM For FIRST TIME SINCE 1998, steers U.S. industry to 13% gain


FEBRUARY U.S. AUTO SALES

Ford tops GM, steers U.S. industry to 13% gain


Automotive News -- March 2, 2010


Editor's note: The first paragraph in an earlier version of this story listed the wrong month for the sales results.

DETROIT -- Ford Motor Co. led the U.S. industry to a 13 percent sales gain in February while topping General Motors Co. in monthly sales for the first time in 12 years.

Ford's 43 percent increase marked its fifth straight monthly advance in its home market.

Total industry sales climbed by 91,381 vehicles from February 2009, which was the weakest month in the market's three-year slump. Last month's seasonally adjusted annual rate was 10.36 million vehicles, down from January's 10.54 million but well above 9.1 million a year earlier.

Toyota Motor Sales U.S.A. fared better than analysts had projected, dropping 9 percent in the midst of its recall crisis.

Chrysler Group, the only other major automaker projected to post a decline, rose less than a percent. Subaru, up 38 percent, and Nissan North America, up 29 percent, had the strongest advances behind Ford.

“Sales in both January and February were much better than they could have been, given weather-related issues, Toyota recalls and seasonally weak demand," said KeyBanc Capital Markets analyst Brett Hoselton. "We continue to expect the overall trend in sales to move gradually higher throughout 2010 and into 2011."

Ford's sales of 142,006 light vehicles last month were 471 more than GM, which advanced 12 percent. The last time Ford topped GM in monthly sales was July 1998, when GM was crippled by a strike at its Delphi parts unit.

GM has been No. 1 annually since 1931.

While GM's overall February sales rose, demand is still about half of the automaker's pre-recession levels.

A combined 33 percent advance at Buick, Cadillac, Chevrolet and GMC more than made up for an 86 percent drop at the automaker's four canceled brands: Hummer, Pontiac, Saab and Saturn.

GM said it would offer a range of 0 percent financing offers on 2009 and 2010 vehicles. It also announced an executive shake-up that centers responsibility for delivering a promised sales turnaround on North American President Mark Reuss.

Jack Nerad, an analyst at Kelley Blue Book, said GM's results showed the automaker was still struggling from a "post-bankruptcy syndrome."

"A percentage of the American buying public has been turned off by GM's bailout," Nerad said in a note. "The
fact that Ford is a major beneficiary of Toyota's safety recalls is another factor in this complex mix."

Camry crimped

Toyota's uncharacteristic decline was led by a drop of nearly 20 percent for its top-selling Camry sedan, prompting the company to offer sharply expanded incentives for March. For the second straight month, Toyota Division declined while Lexus gained.

Ford's U.S. sales were powered by gains for the Fusion, a Camry competitor that saw sales more than double from a year earlier.

Ford sales chief Ken Czubay said the Fusion was winning new customers for Ford in six out of 10 cases, calling the mid-sized sedan "the poster child" for the automaker's strategy of taking business without being pulled into a price war.

Toyota's major competitors gained ground. In addition to Nissan's gain, American Honda reported a 13
percent sales increase. Hyundai saw sales increase 11 percent.


Barclays Capital analyst Brian Johnson said Toyota's discounting raised the pressure on its rivals to offer their own competitive discounting.

"These expensive programs should represent a material step up in cost of incentives," Johnson said in a note for clients.

He estimated that it would cost Toyota almost $4,700 per vehicle to offer 0 percent financing for five years, an effective discount that almost triples what the automaker had been spending on incentives.

Ford vowed not to be drawn into a price war, although executives said that the still-unsteady pace of economic recovery made pricing a more important factor for consumers.

"The battlefield is strewn with a lot of competitors who have fallen to over-merchandising," Czubay said. "We will continue to let our products do the talking."

Reuters contributed to this report.

You can reach Charles Child at cchild@crain.com.

Views: 39

Tags: Automotive News, FEBRUARY CAR SALES, Ford Motor Company, Outsells GM, U.S., industry, steers

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