GM, Ford sales take big drop in November

By James R. Healey
USA Today

General Motors and Ford Motor, the world's biggest automakers, were hit with big U.S. sales drops in November despite arrays of new models and discounts that have been averaging close to $4,000 per vehicle.

Both companies promptly said they'll cut first-quarter production next year by 7 percent to 8 percent from first-quarter 2004 to avoid a big overstock of unsold models and the big rebates necessary to sell them.

GM says it also will lay off 950 at its Linden, N.J., factory early next year and discontinue slow-selling Chevrolet Blazer and GMC Jimmy sport utility vehicles built there. Both have been replaced by newer designs. GM says it has no plans to build other vehicles there. And GM is closing a Michigan foundry and a Baltimore plant that builds out-of-date vans.

Ford's November sales were 7.4 percent worse than a year earlier. Healthy starts for the redesigned Mustang and other new models failed to offset declines among older vehicles. GM dropped a startling 16.7 percent despite its generous rebates. All nine of its brands nose-dived.

"GM's November sales overall were softer than expected," acknowledged John Smith, vice president in charge of North America sales. He said that several new models, such as the Chevrolet Equinox SUV and Cadillac STS sedan, were strong.

Chrysler Group beat the Detroit jinx, riding the popularity of its new Chrysler 300 sedan, Dodge Magnum station wagon and Dodge Durango SUV to a gain.

GM, Ford and Chrysler Group claimed only 56.6 percent of new vehicle sales in November, down from 59.5 percent a year ago. Asian brands snared 35.8 percent, up from 32.3 percent. Europeans slipped to 7.6 percent from 8.2 percent. Detroit's slide despite big rebates and plentiful new models is prompting musings about how soon foreign brands might claim more than half the U.S. market.

Overall, automakers sold 4.9 percent fewer new vehicles last month than they did a year ago, hitting an annual rate of 16.4 million, down from a 17 million pace a year ago, according to Autodata.

By automakers' calculations, dealerships were open one more day a year ago than they were last month, so some of the drop is due to fewer selling days.

Though studies show that Detroit's quality has improved, "Domestic models are far more likely to be avoided by consumers because of perceived reliability concerns than are Japanese and European models," according to an analysis published yesterday by consultant J.D. Power and Associates.

Winners:

• Nissan, powered by a redesigned Pathfinder SUV and its full-size Armada SUV and Titan pickup, zoomed 25.7 percent from a year ago.

• South Korean maker Kia rocketed 44.1 percent on the strength of its premium Amanti sedan and its SUVs.

Losers:

• Mitsubishi sales collapsed 50.9 percent as the struggling brand tries to find a workable sales strategy.

• Volkswagen, hurt by quality problems, lacking new models and getting no boost from its Audi brand, fell 31.9 percent.