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The Honolulu Advertiser
Posted on: Thursday, January 5, 2006

Detroit woes or not, vehicles are selling

By Sarah A. Webster
Detroit Free Press

DETROIT — While it may not feel like good times in the Motor City, 2005 was the third-best sales year in history, with consumers buying nearly 17 million cars and trucks nationwide.

Despite the strong level of auto sales, last year will go down in history as a volatile one — and largely influenced by the shock of $3-a-gallon gasoline over the summer.

Consumers chose fuel-efficient cars and crossovers over SUVs and pickups. Car sales were up 2.1 percent, and light-truck sales were down 0.8 percent. More than half of all purchases were still pickups, SUVs and vans, but car sales haven't outperformed trucks like this for more than 25 years.

Ford Motor Co.'s new president for the Americas, Mark Fields, said yesterday at the Greater Los Angeles Auto Show that consumers "really do want to buy American brands." But they seemed to prefer foreign nameplates last year.

Auto sales for the year were down 4.3 percent at General Motors Corp. and 5.0 percent at Ford Motor Co. While the Auburn Hills, Mich.-based Chrysler Group, part of DaimlerChrysler AG, made impressive gains, with a sales jump of 4.5 percent, Asian competitors made inroads sure to send shivers through Detroit.

Annual sales were up 9.7 percent at Toyota Motor Corp., boosted by sales of hybrid gasoline-electric vehicles, the popular Camry model (the best-selling car in the car-loving United States last year) and Lexus, which was the best-selling luxury brand again last year. Other Asian brands such as Nissan, Honda and Hyundai were also especially popular last year.

Still, the best-selling brand in America remained a domestic one last year.

For the first time since 1986, GM's Chevrolet outperformed Ford as the nation's top-selling brand. Chevrolet sold 2,651,125 cars and light trucks, while Ford sold 2,634,041. That will give GM bragging rights for the next year.

Another big change for the year gone by: Incentives declined 4.5 percent industrywide.

The year in auto sales was a bit of a roller-coaster ride. It got off to a slow start, rose over the summer as automakers offered employee pricing for all buyers, and then ended on a down note. December sales were off 3.8 percent.

But auto sales were strong overall, with 16.99 million cars and trucks sold. There were only two better auto sales years in history: 2000 and 2001.

GM and Ford struggled through it, though, starving for more buyers in the midst of this auto sales feast.

Market share for the once-formidable domestic automakers fell to 26.2 percent at GM and 18.6 percent at Ford. In all, the two Detroit-area automakers lost 2.4 percentage points of market share last year. Nearly each percentage point keeps a single assembly plant and several parts plants in operation, so the sales decline will likely be painful.

GM and Ford enter 2006 preparing to close plants and lay off tens of thousands of workers to bring their costs in line with demand.