Mining The Silver Lining
The auto industry is on track for one of the best sales years on record, automakers and analysts said, as sales pushed by zero-percent financing help U.S. automakers keep up with foreign competitors in November.
Although the totals reported Monday dropped from October's torrid pace, U.S. vehicle sales remained strong as the lure of free financing began to weaken and dealers' inventories thinned.
Foreign automakers also reported strong growth, too, including Mitsubishi Motors Corp., which reported its best U.S. sales month in history. Domestic sales by Honda and Toyota also showed gains.
Industrywide, monthly sales were up 7 percent from November 2000. U.S. automakers saw their sales rise 6 percent, Asian automakers reported a 13 percent increase, and sales for the European automakers were flat.
Both industry analysts and those within the automakers say 2001 could be the second or third best sales year on record.
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General Motors Corp. and Ford Motor Co. reported higher vehicle sales in November compared with November 2000, but the Chrysler arm of DaimlerChrysler AG reported a decline for the month.
GM reported its U.S. vehicle sales were up 13.2 percent in November versus the year-ago period, powered by a 36-percent jump in light truck sales. GM's passenger car sales, however, were nearly 11 percent lower than those during November 2000.
The automaker's top sales analyst said Monday that the company's no-interest finance promotion continued to prove effective.
"The Keep America Rolling program is still boosting sales in November, but we're down from October," Paul Ballew, GM executive director for market and industry analysis, said during a conference call with reporters and financial analysts.
Ford otor Co. reported its U.S. sales in November rose by 5 percent over November 2000, but year-to-date sales still were 6.6 percent below those for the first 11 months of last year.
The Chrysler arm of DaimlerChrysler AG said its total vehicle sales were 5.8 percent lower than those during November 2000. However, sales of its minivans, Chrysler PT Cruiser and Jeep Liberty were strong.
Japanese automaker Toyota Motor Corp. reported a record November with a 9.7 percent rise in its sales.
"Industry sales steamed ahead in November, driven by great values and record-low interest rates," said Jim Press, executive vice president and chief operating officer.
Mitsubishi reported a 27 percent increase in total vehicles, compared to November 2000.
U.S. sales for Honda Motor Co. were up 11.5 percent from November 2000, setting a record for the month.
Honda's strong sales month was powered by a 24-percent jump in light truck sales led by the redesigned CR-V, which saw its sales soar by 57.6 percent from a year ago.
Ford said its F-Series pickup trucks, Escape sport utility vehicle and Windstar minivan all posted record November sales.
Ford passenger car sales were up 1.8 percent last month over November 2000, while truck sales rose 6.6 percent.
The Dearborn-based automaker also announced Monday a series of cost-cutting measures that include the elimination of the second shift at its Edison, N.J., assembly plant, affecting about 600 hourly and 30 salaried employees.
The offer of zero-percent and low-interest financing on most models once again was credited with buoying sales, but to a lesser degree than during October, said George Pipas, Ford U.S. sales analysis manager.
"As expected, this result was not as strong as October's extraordinary sales, but it is a very good result," Pipas said in a conference call. "We expect our market share will be about equal to a year ago."
Zero-percent finance offers have been credited with the record sales pace in October that resulted in a 24-percent jump in vehicle sales industrywide over October 2000.
GM kicked off the zero-percent finance wars Sept. 20 as a way to revive flagging sales in the aftermath of the Sept. 11 terror attacks. Ford and the Chrysler arm of DaimlerChrysler AG followed suit within days.
"It's increased traffic tremendously," said Brian Ambrose, an analyst with the marketing firm KPMG LLP.
"About one-third of sales are those using zero-percent financing," he said.
Pipas predicted December sales would be down considerably because they were "pulled ahead" to October and November by the attractive incentive offers.
Healy agreed, citing waning buyer interest and a lack of selection because strong October and November sales depleted dealers' stocks.
Adding to its portfolio of come-ons, Chrysler is offering a 7-year-or-100,000-mile warranty on powertrains of vehicles bought between Nov. 1 and Dec. 31, a program it calls "Home for the Holidays."
South Koran automaker Hyundai Motor Co. reported its tenth consecutive record sales month with a 53 percent increase in sales over November 2000.
"Our sales momentum continues, led by the Santa Fe sport utility vehicle and the redesigned 2002 Sonata," said Robert Cosmai, Hyundai's vice president of sales.
German automaker Volkswagen AG reported its best November sales in 28 years with a 3.2 percent increase over November 2000. The Volkswagen Passat set a November sales record, besting sales during November of last year by 38.9 percent.
By Ed Garsten © MMI The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed