DETROIT—General Motors Corp on Friday posted a surprise 2.6 percent increase in January U.S. vehicle sales on the back of popular new models as its Japanese and U.S. rivals reported declining sales.
GM, the No. 1 U.S. automaker, reported a jump in retail passenger car sales supported by a new Chevrolet Malibu model and raised its first-quarter North American vehicle production forecast by 2 percent, showing more signs that a focus on developing new vehicles has taken hold.
The rest of the major automakers reported sales declines, including Toyota Motor Corp, now the No. 2 seller in the United States.
Toyota, which reported a 2.3 percent sales decline, offered far lower incentives on its vehicles than the U.S.-based automakers. Sales of the Camry, the top-selling car in the United States, were about flat, while sales of its Prius hybrid jumped 37 percent.
Ford Motor Co , now No. 3 in U.S. sales, reported a 3.6 percent sales decline–broadly in step with sales dips posted by Toyota and Honda Motor Co Ltd.
Chrysler LLC, controlled by Cerberus Capital Management, said sales fell 12 percent as it slashed sales to rental fleets and saw weaker demand for its pickup trucks and SUVs, while Nissan Motor Co Ltd's sales slid 7.3 percent.
Industry executives and analysts broadly expected U.S. auto sales to decline in January, typically a weak sales month, but the overall figure was worse than most expected.
"It's not going to get any easier–at least for awhile," Ford group vice president Jim Farley said in a statement.
Auto sales results are one of the first snapshots each month of U.S. consumer spending.
Higher gasoline prices combined with the slumping housing market have raised concerns the U.S. economy could tip into recession this year and cause consumers to delay big-ticket purchases such as new vehicles. That has led many in the auto industry to predict a second straight year of lower sales.
The Federal Reserve, the U.S. central bank, moved to head off the possibility of recession by cutting its benchmark federal funds rate by a half percentage point on Wednesday after a steep cut a week earlier.
Down Year Expected
Many automakers and analysts are predicting 2008 sales in the range of 15.5 million vehicles -- down from 16.14 million last year, when sales hit their lowest point since 1998.
January sales ran at about 15.26 million vehicles on an annualized basis, down almost 8 percent from last year's rate and below what many analysts expected. The rate was estimated as BMW is not scheduled to report its results until Monday.
Edmunds.com analyst Jesse Toprak said the industry could rebound in the second half if the stock and housing markets, and gas prices stabilize.
"The demand is still there," he said. "There's a lot of product that's going to be coming in the pipeline in '08. That might help generate more interest. Nonetheless, it's going to be a very difficult market for the first half."
New models, hybrid vehicles like the Toyota Prius and small cars performed best among most automakers. Older models and gas-guzzling trucks fared less well.
GM said its retail sales were up more than 11 percent in January, as part of its strategy to shift more focus to higher-margin sales to dealers. It credited some of that rise to popular new versions of such models as the Chevrolet Malibu and Cadillac CTS cars.
Ford, which Toyota passed last year as the No. 2 seller of vehicles in the United States, is scheduled to unveil several new products this year, including a new version of its top-selling F-150 pickup in the fall.
In addition to the 3.6 percent overall decline, Ford saw retail sales fall 9 percent in January. Ford's sales to rental fleets, however, were up 9 percent in the month.
"Despite the weak selling rate, both General Motors and Ford performed well," Calyon Securities analyst Mark Warnsman said in a research note. "In fact, GM characterized its sales as 'outstanding.' Ford posted a solid sales month."
All three U.S.-based automakers continued to cut inventories to try to reduce the need for costly incentives.
However, analysts have said the expected second straight year of declining sales in 2008 will likely force automakers to ratchet up incentives to lure consumers into the showrooms.
The average January automaker sales incentive in the United States rose 7.5 percent from last year to $2,401 per vehicle sold, according to Edmunds.com. But that was down 2.3 percent from December.
Incentives averaged above $3,000 per vehicle sold by GM, Ford and Chrysler, and only Chrysler showed a decline from last year, Edmunds.com said. Toyota, Honda and Nissan also each reported higher incentive rates versus last year.
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