Even Blizzards Can't Obscure This: Ford Tops GM in February Sales
March 02, 2010

February marked the first month since August, 1998, that Ford Motor Co.'s monthly sales topped those of chief rival General Motors Co., providing an unexpected jolt in a month when the broad industry was handicapped by severe winter weather in the northeast regions of the country - and by the spillover from Toyota's safety-recall debacle.

Total U.S. auto sales for the month were 779,743 units, an increase of about 13.5 percent from year-earlier sales of 687,182, when the American automotive market was at the very bottom of one of its biggest slumps ever. And the February pace represented a seasonally adjusted annual sales rate of 10.4 million units, a number at the upper middle of most SAAR projections.

"The good underlying news is that the industry hasn't gone into reverse in terms of its recovery," said Jessica Caldwell, senior industry analyst for Edmunds.com.

"At the beginning of the month there was weak retail performance, but when Presidents' Day [sales] came around and there were good deals out there, we saw strong sales - even stronger than history would indicate."

Ford Surges to the Front

That was particularly true for Ford.

The long-time No. 2 U.S. automaker became No. 1 again for at least a month, decades after the last time that Ford was the nation's most prolific vehicle producer and about 12 years since a strike was crippling GM - and opened the door briefly for Ford to assume the top spot.

Ford's sales increased by 45.6 percent over February, 2009, and by 22 percent over January of this year. Car sales were up 54 percent versus a year ago; utilities were up 39 percent and trucks were up 36 percent. Sales for the Ford brand rose 46 percent in February; Lincoln sales increased by 19 percent and Mercury sales were up 24 percent.

"The strength of our new products and Ford's leadership in quality, fuel efficiency, safety, smart design and value are resonating with customers," said Ken Czubay, Ford's vice president of U.S. marketing, sales and service.

Edmunds.com's Caldwell agreed. "(Ford has) a balanced portfolio of products; they're not putting all their eggs in one basket." She also noted that GM now is down to only four core brands, just like Ford's stable (including Volvo for now). "That equals the playing field."

Strong fleet sales also boosted Ford.

Toyota: Could Have Been Worse

It also helped Ford that Toyota Motor Sales USA had pretty much left the field in February. Toyota's overall U.S. sales were down nearly 9 percent - almost 11 percent for the Toyota division, which has borne the brunt of the bad news about recalls.

Over all three of its brands, because of the publicity and lost momentum in its dealerships, the company sacrificed about 18,000 sales in February compared with typical levels, estimated Bob Carter, the Toyota division general manager.

But Toyota also deployed what Carter called "the most far-reaching [incentive] program that Toyota has ever conducted," beginning immediately and extending through April 5. It includes zero-percent loans or hugely discounted lease prices on a range of models that covers about 80 percent of Toyota's business.

"It's aggressive," Carter said, "but rather than just discounting our vehicles, it shows our long-term confidence in the value of the Toyota lineup."

Winter Blues

For the moment, only GM said right away that it would counter Toyota with its own new round of incentives: zero-percent financing on models that account for about 55 percent of its volume, but not on any of its hot new sellers such as Chevrolet Camaro and Equinox.

The succession of storms in the Midwest and especially the Northeast and mid-Atlantic regions affected every automaker to some degree, of course, but GM seemed to make the point that its business might have been hurt worst. GM sold 12.2 percent more vehicles during February than a year earlier, largely on the strength of extremely robust fleet sales.

But GM figured that retail sales in its Northeast region for Chevrolet were down 17 percent, as snows kept customers from showrooms - or outright shut dealerships -- while Chevy's retail sales rose in every other region.

OEM executives on Tuesday continued to point to economic storm clouds hovering over the industry's long-term outlook, as regular reports on business and household finances provide a mixed picture at best. "The primary risk is in the housing market and in [weak] employment," said Michael DiGiovanni, GM's top U.S. market analyst.

And, Ford's Ken Czubay, vice president, U.S. marketing, sales and service, said, "Consumer confidence seems to have reached a plateau."

Ford Suddenly The Big Cat

If not for Nissan Motor Co. Ltd.'s 29.5-percent improvement in February, Ford's 45.6-percent jump would have been completely gaudy. The other gainers among the Big 7 automakers barely scratched out double-digit increases.

Ford sales executives mostly sloughed off the effect of probable gains from Toyota's woes. Czubay insisted Ford is not intent on conquesting any particular rival, focusing more on its own models. "It really all comes down to the product," he said, but did allow that many of Ford's current bestsellers, like the Fusion - which has set sales records in ten of the last 11 months - are heavily cross-shopped against Toyota.

Ford did win its stellar February numbers with a 40-percent reliance on fleet sales, however, although chief of U.S. industry analysis George Pipas said traditional fleet bastions like the F-Series (up 39.3 percent compared with last February) are starting to show renewed retail strength as the industry's sales still deeply lag the nation's historic replacement rate, saying for F-Series, quasi-commercial buyers who have held off purchases "are just compelled" to begin to purchase new models.

Pipas said retail sales in fact were up 50 percent compared with the same month last year.
Ford's car line had a dandy month, headed by the Fusion's powerful 116.5-percent surge to 16,459 sales. Taurus, although sales are still a fraction of what they were in the nameplate's glory era, was up 93.3 percent and Mustang, lagging of late, popped up for a 71.1-percent gain. All of Ford's car except the Crown Victoria (-23.5 percent) improved over last February.

On the utility side, Ford's Edge posted a 66.1-percent gain and the Escape led the pack with 15,156 sales that represented a 50.2-percent increase. Even the long-moribund Explorer and Expedition showed increases: 31.4 and 58.1 percent, respectively.

At Lincoln, the brand's 18.6 percent gain was fueled by a 53.8-percent hike for the MKZ midsize sedan; the MKS flagship slipped by 12.1 percent to just 1,183 units, however, and the MKX crossover also dropped by 13 percent.

Sales for Mercury improved 24.5 percent, driven by a 99.6-percent leap for the Milan, Mercury's variant of the Fusion midsizer. The Mariner compact crossover gained 39 percent and the fleet-favorite Grand Marquis jumped 65.5 percent.

General Motors: Down to Fighting Weight

GM's moderately improved February sales of 146,825 units relied on three huge factors: fleet purchases, retail sales of several hot recently launched vehicles - and Toyota's weakness.
Fleets accounted for 29 percent of GM's overall sales, higher by three or four percentage points than company executives would like over the long term. But GM isn't unhappy with any sale, especially when returning strength in the fleet market indicates "that business conditions are improving," DiGiovanni said.

Besides, he added, "We think retail sales will come along as we move into spring with better weather."

Already during February, there were encouraging retail signs for GM despite the fact record snows snuffed out thousands of potential sales. Retail sales were up for each of its remaining four core brands: Chevrolet's by 1 percent overall, Buick by 18 percent, GMC by 25 percent and Cadillac by 13 percent.

"That was the fifth month in a row of increased retail sales for our core brands," said Susan Docherty, GM's vice president of U.S. marketing. "We've made progress since the bankruptcy. It's giving us a lot of confidence that our plan is working in the marketplace."

Sales of GM's newest vehicles - including new versions of the Camaro and Equinox, Buick LaCrosse, Cadillac SRX and GMC's brand new Terrain - accounted for fully one-quarter of GM's retail sales for the month. Sales for the four remaining brands were up by more than 32 percent during February while sales of GM's phased-out brands - Saab, Hummer, Saturn and Pontiac - tanked.

"We went from eight brands to four yet our total sales were up by nearly 15,000 units for the month," Docherty said. "That's a good performance given the phase-out of four brands."
As for Toyota's woes, DiGiovanni said that GM "got our fair share" of customers frustrated by its rival's problems, but he declined to specify how many that was.

Docherty explained that most of Toyota's volume comes from cars, not trucks, and that Chevrolet's car sales were up by 10 percent in February - while Chevrolet truck sales declined by 5 percent. Heading into spring, GM's new incentives will especially target truck buyers during a traditionally strong truck-selling season.

Overall, Docherty noted that GM continued to cut down its incentive spending more quickly than the industry in February, while its transaction prices continued to rise smartly. "We want to earn, not buy, sales," she said.

But Toyota's ambitious new incentive program has created a new wrinkle. Docherty said that GM already had planned to offer zero-APR loans for up to five years on remaining 2009 inventories - before Toyota's announcement. Its deals on 2010 models presumably were hatched after Toyota went first.

Toyota: "Selling Cars Again"

Toyota Motor Sales U.S.A. reported February sales of 100,027 vehicles, down nearly 9 percent. But company executives were relieved their performance relative to a year ago wasn't much worse.

Not only was the company coping with adverse effects of publicity about its safety recalls and the grilling of its executives at congressional hearings in Washington, D.C., but also with several other factors. The winter storms, yes. There also were potential customers who stayed out of showrooms because they'd heard rumors about the major new incentive offensive Toyota was planning.

And because the company and its dealers had decided to focus on fixing problem cars for existing customers, they couldn't pay as much attention to the people who did come to Toyota showrooms.

"With the challenges we had in February and our singular focus on servicing, frankly I'm surprised we sold as many cars as we did," said Carter.

There were a few actual bright spots for the company. Toyota continued to fill the distribution pipeline with the new version of its Toyota Sienna minivan, behind an advertising campaign that emphasizes why adults - as well as kids - should like it.

And the Lexus luxury-car division sold 5 percent more cars in February than a year earlier, as well as 6 percent more SUVs. The division reported some strong sales spurts in February on a regional basis - in Florida, for instance - which encouraged the company about the prospects for a general pickup in luxury-segment sales.

But in terms of forfeited sales in February, Toyota took an especially big hit among potential first-time Toyota buyers, Carter said - the "majority" of the 18,000 "lost" sales for the month.

Carter maintained that despite competitors' best efforts to poach Toyota loyalists who might have been dismayed by the problems with their own vehicle or, in general, by how Toyota has handled the recalls, "we saw very few Toyota customers outflow to other brands."

Moreover, Carter declared, with the launch of its vast new program of incentives - which includes free-maintenance programs for existing customers who buy new vehicles - "We're back in the sales business."

A Toehold For Chrysler

Chrysler slid over the wire in February with a meek 0.9-percent sales improvement. Sales for many models improved modestly, but most of the company's gains are tempered by the widespread knowledge Chrysler is running almost entirely on fleet sales.

One report said nearly 60 percent of Chrysler's February sales were fleet purchases - a number that jibes with a source telling AutoObserver Chrysler had scored a couple of fat fleet contracts - fat enough to all by themselves keep the company's midsize-car assembly plant in Sterling Heights, MI, going for several weeks.

That likely explains most of the out-of-the-norm, 118-percent gain for the flagging Chrysler Sebring and 78-percent jump for the Avenger midsizers. Dodge's Charger, another fleet staple, gained 55 percent in February.

At Jeep, the Compass compact shot up 107 percent and its Patriot platform-mate rose 38 percent. The soon-to-be-abolished Commander leaped 125 percent to 2,202 sales and the Grand Cherokee was up 40 percent. The usually solid Wrangler slid 34 percent, however, probably as the result of markedly lower incentives compared with its showroom companions.

Several Dodge models lost ground in February, including a 10 percent drop for the Journey compact crossover, recently one of the brand's comparative success stories, as well as a 35-percent drop for the Challenger. The Caravan minivan squeaked out a 4-percent increase and is up 12 percent so far this year.

Nissan: Exemplar of Recovery

Nissan North America posted a 29.5-percent sales increase for February, with sales of 70,189 units compared with just 54,249 a year earlier. It finished the month solidly in the upper echelon of the U.S. market's Big 7 OEMs.

"The gains were posted across our car and truck lineups," said Brian Carolin, senior vice president of sales and marketing.

Nissan division sales were up 32 percent for the month, including surges for the Versa subcompact, the Rogue compact crossover, Maxima sedan, Frontier SUV and Armada SUV.

Even Infiniti sales, which greatly suffered last year, extended their nascent recovery. They increased by 11 percent for the month over February 2009, including a 25-percent increase for sales of the G Sedan and a 41-percent boost for sales of the G Coupe.

Hyundai Continues Momentum

Hyundai Motor America posted February sales that were 10.2 percent higher than a year earlier, at 34,004 units, marking its 14th consecutive month of year-over-year retail market-share gains.

It was about this time last year that Hyundai began acquiring significant momentum in a moribund marketplace, thanks to the success of its just-launched Hyundai Assurance initiative and marketing campaign. And because the company had a great 2009 overall, any gains in 2010 are stacked on top of tough comparisons.

"We're excited about the momentum we're carrying into March," said Dave Zuchowski, Hyundai's vice president of U.S. sales.

Given the huge advertising push Hyundai has put behind its new, U.S.-built Sonata, including a handful of Super Bowl ads on February 7, executives had to expect a big bump in sales - and they got a 58-percent increase for Sonata in February over sales of the superceded Sonata a year earlier.

Also, sales of the Tucson SUV were up by 102 percent, the freshened Santa Fe SUV by 52 percent, the Genesis near-luxury line by 39 percent and Accent by 22 percent.

Sales for the Hyundai Group's Kia brand (which are included in Hyundai's totals) set the brand's February record, at 24,052 units, a number that represented a 9 percent gain over February 2009.

Sales were fueled by the all-new 2011 Sorento midsize crossover, a 8,207-unit contributor to the total. The widely acclaimed Soul hatchback anted up with a solid 3,600 units and the compact Forte sold 4,333 for the month.  

Honda: Keeping Its Head Down

American Honda Motor posted a healthy increase of nearly 12.7 percent in February sales, or 80,671 units compared with 71,575 units a year earlier.

The increase wasn't spectacular, but it was solid. And in an environment when its longtime Japanese rival, Toyota, is getting savaged for poor quality and incompetent management of its US market presence, Honda executives certainly will settle for that, for the time being.

"A year ago the economy and our industry were at a low point marked with great uncertainty," said John Mendel, executive vice president of sales for American Honda. "While we remain cautious, we're happy to see customers actively seeking Honda products."

Honda division saw a 12 percent sales increase, led by an increase of nearly 41 percent in sales of the Accord lineup, which includes incremental sales of the new Crosstour hatchback bodystyle. Its Odyssey minivan notched an 11-percent sales increase in the month.

The Acura upscale division did even better, posting a 17-percent increase in one more encouraging sign that the luxury segment of the U.S. market may be recovering. MDX led the division with a 65-percent sales increase compared with a year ago.

Encouraging Leap For Volkswagen

At Volkswagen of America Inc., sales rose a healthy 32.6 percent compared with last February as the brand's bread-and-butter models continue to post increasingly stronger performances.
The best-selling Jetta line jumped 30.8 percent for the month and the streamlined Passat lineup increased 67.4 percent. The GTI leaped 166.8 percent and the entire Golf/GTI lineup was up 69.7 percent.

Volkswagen has to be particularly encouraged by the strength of the Tiguan compact crossover, which notched a heady 94-percent increase compared with February 2009 and outsold every VW nameplate save the Jetta.

Decliners at VW included the Eos hardtop convertible, dropping 30.4 percent and the CC, sliding a slightly worrying 23.5 percent. The Touareg midsize crossover, which is replaced soon by an all-new model, dropped 44.1 percent to just 285 sales.

Mercedes Rises A Bit

Mercedes-Benz USA said sales increased a modest 8.4 percent compared with February 2009 - although the company's reporting includes sales of the Sprinter commercial van; without the Sprinter, sales of Mercedes passenger vehicles rose 4.7 percent. The brand's sales leader was the new-generation E-Class midsizer, which posted a hefty 92.2-percent increase at 4,043 units.

Mercedes' crossovers had a fruitful month, with sales perhaps boosted by the winter's heavy snowfalls. The fullsize GL was up 45.5 percent. The M-Class crossover was 22.3-percent gainer, while the smaller GLK crossover recorded its own 10.8-percent improvement.

Mercedes' cars didn't fare so well in February, however. Apart from the E-Class and a small 6.4-percent gain for the entry-level C-Class, all of the car lines lost ground. The CLK was off 82 percent and the CLS dropped 85.1 percent. The S-Class flagship slid 27.4 percent to 715 units and the SLK roadster plunged 78.4 percent to just 61 sales, while the SL roadster was down 77.5 percent.

Small Rise For Mazda

Mazda North American Operations squeezed out a 4-percent sales gain in February, led by the Mazda3 compact car line, which was up by 29.4 percent.

Mazda's only other gainers for the month were the CX-7 and CX-9 crossovers, respectively improving sales by 14.1 percent and 22 percent.

All of Mazda's other models declined compared with sales from last February: the Mazda6 midsize sedan was off 30.9 percent and the Mazda5 compact minivan was down 12.5 percent. The RX-8 sportscar continues to fade, with sales amounting to just 77 units in February, a 50.3-percent slide.

Jaguar Land Rover Improves

Sales in February were up 11 percent for the combined Jaguar and Land Rover divisions of Jaguar Land Rover North America.

The total of 2,793 units was made up of 2,032 sales for Land Rover - an 18-percent gain - and 761 on the Jaguar side, a 4-percent decline.

Sales for Jaguar's XF were up 15 percent and XK sales improved 11 percent - but the company reports a virtually depleted stock of the 2009 XJ flagship as they prepare for the all-new 2011 XJ coming later this spring.

At Land Rover, the Range Rover Sport led the model lineup with a 29-percent gain; the revised LR4 was up 31 percent and sales of the flagship Range Rover scored a 24-percent increase to 646 units.

Porsche Ekes Out Slight Gain

Sales at Porsche Cars North America took a slight upturn in February. The company said it sold 1,531 vehicles, 15 more than it sold in February 2009.

Porsche said February was the sixth time in the past seven months that the company posted a year-over-year sales increase.

Porsche's total was boosted by 409 incremental sales of the all-new Panamera sedan and an increase for the Cayenne crossover, although Cayenne sales continue to trail last year's two-month total.

Sales of the 911 model line were off 39 percent and the Boxster/Caymen line was down 64 percent.

Suzuki In Freefall

The sales plunge at American Suzuki Motor Corp. continued almost unabated in February, as the brand's total sales slipped to 1,375 units - a 61-percent drop from February, 2009.

Sales for all of Suzuki's models except for the Equator midsize pickup (+42 percent with 63 sales) declined drastically, with the volume SX4 line off 49 percent and the Grand Vitara crossover down 58 percent.

Suzuki's volume decline comes despite the addition of the Kisashi midsize car, which chipped in with 219 sales for the month.   -- Dale Buss, contributor, and Bill Visnic, senior editor

Photos by the manufacturers

1. Ford Fusion

2. Ford F-Series Super Duty

3. Buick LaCrosse

4. Toyota Prius

5. Chrysler Sebring

6. Hyundai Sonata

7. Honda Accord Crosstour

8. Volkswagen Tiguan 

 

Posted by Bill Visnic at 5:50 PM under Business , Chrysler , Companies , Featured , Ford , GM , Hyundai, Kia , News , Toyota , Volkswagen, Audi | Comments (13) | digg this | Seed Newsvine

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