September Sales, Plunging for Ford and Flat for Gm

By: Evander Klum

September was a tough month for the auto industry relative to the weak housing market and sloping consumer confidence, according to U.S sales figures published on Tuesday. The condition was helped by automakers like General Motors, Honda and Nissan which have successfully released their new vehicles.

Ford Motor Co. significantly dropped in their sales by 21 percent for the month. The 62 percent reductions in sales to rental car companies have contributed largely to the plunging sales of the automaker.

The sales of Toyota Motor Corp. also fell by four percent but still, the Japanese automaker managed to run ahead of Ford for the month and also for the January-September period. Toyota is well on its way of replacing Ford as the nation's second automaker after GM. At the end of September, Toyota managed to sell 28,654 vehicles more than Ford did.

On the other hand, Chrysler LLC's sales also declined by five percent.

According to a report released by Autodata Corp, U.S. overall auto sales were down by three percent from last September.

For GM, after undergoing a two-day strike and a month of intense labor negotiations with the United Auto Workers union, its sales were flat from last September. The strike caused 30,000 fewer vehicles from GM (maker of top of the line parts like ). According to GM's top sales analyst, Paul Ballew, the lay-off of the workers did not have any impact on GM's sales and the company's production schedule remained the same.

The Federal Reserve's interest rate cut done in the mid of September did not pose any immediate impact on the sales in the auto industry. However, it calmed the auto market and it guaranteed that the constricting mortgage market won't cause any effect to automotive credit.

"For us as an industry, we support and applaud the Fed's move because we cannot have the spillover effects into other categories," Ballew said.

Ballew added that continuing increase in energy prices and sloping of important markets like what's happening in California and Florida will continuously have negative impacts to the automotive industry until the fourth quarter of the year.

For Erich Merkle, vice-president of auto industry for IRN Inc. it will take months for the rate to drop off to the average consumer.

"These are pretty weak numbers and this is indicative of the overall weakness we've seen in the economy," Merkle said.

The sales of GM declined by four percent but its truck sales increased by four percent thanks to its Chevrolet Silverado and its other new pick-ups. The Buick Enclave, Cadillac CTS and the other new crossovers posted an increase of 73 percent in their sales for September.

For Ford Motor Co, its car sales fell by 39 percent from last September and its truck sales also declined by fiver percent. The best selling Ford F-150 lost its appeal as Toyota and GM introduced new pick-ups. The sales of the F-150 fell by 21 percent.

According to George Pipa, Ford's top sales analyst, the company is cutting its sales to daily rental fleets by more than 30 percent or 135,000 vehicles. With Chrysler and GM, Ford had been cutting rental sales causing decline in profits and hurting brand image.

Meanwhile Edmunds.com reports that Chrysler's car sales increased by 18 percent drawing from its introduction of the new redesigned Sebring. The truck sales declined by 11 percent despite the incentives offered together with the vehicle.

For Toyota, its car sales were down by four percent but its biggest sales decline is on its truck segment by six percent. According to the automaker, the figures were compared with their best-ever September 2006.

"We're confident the next few months will keep us on track to reach our growth targets," says Irv Miller, Toyota's spokesman.

Over all sales for Honda Motor Co. in the U.S shot up by nine percent. Honda's car sales increased by seven percent and its truck sales by 13 percent for the month.

Nissan with its redesigned Altima sedan and new Rogue crossover gained seven percent. Car sales were up by 17 percent and truck sales falling by six percent.

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