Tuesday, March 4, 2003

February U.S. auto sales flag

By John Porretto
The Associated Press

DETROIT - A continued barrage of incentives couldn't overcome consumer skittishness as U.S. vehicle sales slid last month and at least one automaker prepared to scale back production.

General Motors Corp. said Monday that sales of new cars and light trucks fell 19 percent in February compared with a robust month a year ago.

GM, like others in the industry, saw business drop considerably last month as winter storms crippled parts of the country and economic uncertainty festered.

DaimlerChrysler AG's Chrysler Group said its U.S. light-vehicle volume declined 4 percent, while Ford Motor Co.'s sales were flat.

Several Asian automakers, including Nissan, Hyundai and Mitsubishi, also recorded year-over-year sales declines in February. As a whole, Asian automakers saw their sales slip about one-half percent last month. The group was buoyed by Honda Motor Co., Japan's No. 2 automaker behind Toyota, whose sales were flat. Honda's total sales were up 14 percent.

Most analysts expected Ford's February sales to be about the same as last year. Chrysler's numbers were better than some forecasts. GM's tallies were below expectations, and the automaker said it would cut second-quarter production by 10.5 percent.

A production cut is significant because automakers consider a vehicle sold when it's shipped from the manufacturing plant to a dealer, not when the dealer reaches an agreement with a buyer. Therefore, diminishing production can do the same to the automaker's bottom line.

Ford Monday declined to give specifics on its second-quarter production schedule. The world's No. 2 automaker said its car sales rose 3 percent last month, while light-truck volume - which includes pickups, sport utility vehicles, vans and minivans - was down about 1 percent.

"February was a challenging month," said Jim O'Connor, Ford's group vice president for North American marketing, sales and service.

Ford's Mercury brand sales were off 14 percent from the year-ago period, while Lincoln sales were down 5 percent.

Chrysler car sales were down 2 percent last month. Truck sales were off 5 percent.

Chrysler's top performers included the Jeep Liberty and Dodge Durango, each of which saw sales rise 3 percent year-over-year, and the Dodge Caravan minivan, which was up 17 percent.

Gary Dilts, Chrysler's senior vice president for sales, said consumers would be hard pressed to find a better time to buy a new vehicle thanks to depressed prices and lucrative incentives.

"Industry analysts tell us the affordability index for new vehicles is the best it's been in the past 25 years," Dilts said.

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