Ford and G.M. Suffer as Buyers Shun S.U.V.'s

Personally, I'm waiting for the time when the unrepentant must park theirs...

May 4, 2005
By JEREMY W. PETERS
New York Times

DETROIT, May 3 - The latest automobile sales figures show that Americans are increasingly wary of gas-thirsty sport utility vehicles. That was particularly bad news for General Motors and the Ford Motor Company, which both saw their sales slip last month as consumers continued their steady march into Asian car companies' dealerships.

Both Toyota and Nissan posted record sales gains in April, which helped push overall auto sales in North America up 1.8 percent.

But even as sales were expanding for the industry, they were shrinking at G.M. and Ford. The decline was the sharpest at General Motors, the world's largest automaker. G.M.'s sales fell 7.7 percent from the same month a year earlier, primarily because of a weak demand for S.U.V.'s. The lack of appetite for S.U.V.'s also hurt Ford, which sold 5 percent fewer vehicles in April compared with a year ago.

April's sales numbers showed no signs that the pressure on Detroit from its Asian rivals will let up anytime soon. That became particularly evident on Tuesday as Toyota reported that April had been the most successful month in its history. Its sales were up 21.3 percent on big gains in the number of passenger cars sold.

Nissan also passed a sales milestone last month and reported its strongest April on record. Sales increased 27 percent for the Japanese automaker, compared with the same month last year.

"The strength that G.M. and Ford have had has been in traditional S.U.V.'s," said Ron Pinelli, president of the Autodata Corporation. "Now that there's new product out there, consumers are defecting" from G.M. and Ford to companies offering the newer vehicles.

Ward's AutoInfoBank projected that vehicle sales in North America would reach a seasonally adjusted rate of 17.4 million units this year if sales continued at April's pace, which would be a solid performance for the industry. April's results further suggested that the industry was bouncing back from a slow start at the beginning of the year. Auto sales lagged in January and February but perked up slightly in March. The 1.8 percent improvement over last April is more than double the increase the industry saw from March 2004 to March 2005.

With sales down at G.M. and Ford, the two companies offered very different explanations of the impact high gas prices were having on business. This year, sales of S.U.V.'s have declined not only at G.M. and Ford but at Toyota as well, leading many inside and outside the auto industry to conclude that consumers were staying away from S.U.V.'s in favor of more fuel-efficient cars.

General Motors has long maintained that gas prices do not affect how consumers approach buying a car or truck. But on Tuesday, G.M.'s chief industry sales analyst, Paul Ballew, appeared to retreat somewhat from that position, saying that record gas prices were likely playing some role in falling S.U.V. sales.

"It's probably impacting a bit on the margin," Mr. Ballew said. Pointing to G.M.'s improved large truck sales, he added a caveat: "People want to quickly say large utility sales are down because of gas prices, and that is just not the cause-and-effect relationship that we can find."

By contrast, Ford's top sales analyst, George Pipas, said Tuesday that record gas prices were directly responsible for a sharp decline in the number of S.U.V.'s that Ford sold in April.

Toyota pointed to the surge in sales of its gas-electric hybrid, the Prius, and other more fuel-efficient models as the major reason for its strong performance in April.

Market share, another industry barometer, fell at both G.M. and Ford, according to Autodata. Again, it was G.M. that lost the most ground. Its market share was 25.1 percent in April, compared with 27.7 percent the same month a year ago. Toyota's North American share jumped to 14 percent, from 11.7 percent last April.

The Chrysler division of DaimlerChrysler was the lone strong performer among the Detroit automakers. Chrysler gained market share in April, with 13.7 percent of the North American market, compared with 13.3 percent from a year earlier. Over all, DaimlerChrysler's sales in the United States, which include Chrysler, Jeep and Mercedes-Benz, were up 4.6 percent as against the same period a year earlier.

Although sales were up, DaimlerChrysler suffered a symbolic setback as Toyota sold more vehicles in the United States than Chrysler in April. It is rare for Toyota to crack the Big Three in monthly domestic sales and a sign of the Japanese automaker's ever-growing presence in the American industry.