Sales Fell to Lowest Rate in 4 1/2 Years
DANNY HAKIM, NY TIMES
March 3 Sales of the lucrative, gas-guzzling giants of the
auto industry the Escalades, Excursions, Suburbans and other
big sport utility vehicles are sliding, according to figures
said that rising gas prices and a drumbeat of criticism of S.U.V.'s
figure in the slowing sales. But the biggest culprit, they said,
is a new wave of small and medium-size sport utilities from Asian
automakers that are chipping away at a crucial profit center for
the domestic auto industry.
all, auto sales fell to their second-lowest pace in four and a half
years last month, as snowstorms and worries about a possible war
with Iraq tempered buying. Sales fell 6.7 percent from a year earlier,
to a seasonally adjusted annual sales rate of 15.4 million vehicles.
at General Motors fell 19 percent last month from a year earlier,
and both Ford and G.M. said they were cutting their production levels
for the second quarter, compared with a year ago.
sales were a bright spot in an otherwise gloomy economy last year,
but slowing assembly lines and slumping sales are a troublesome
economic sign, and analysts said today that the carmakers' price
wars had lost their novelty with wary consumers.
they're going to offer them two for one, I don't see how they're
going to keep up the sales rates they had been so optimistic about,"
said Diane C. Swonk, an economist at Bank One. "At some point
in time, we have market saturation."
sales were flat last month, and to maintain that pace, the company
relied heavily on less lucrative sales to corporate and government
fleets. The Chrysler Group's sales fell 4 percent.
words: weather, war and worry," Gary E. Dilts, senior vice
president for sales at Chrysler, said in a conference call today,
summing up the mood over the last month.
particular concern to Wall Street is that Detroit's grip on the
S.U.V. market is eroding, despite the Big Three's incentives
zero percent financing, loans as long as six years and cash-back
offers of up to $3,000.
which has been the aggressive leader in ratcheting up Detroit's
incentive war, said today that it would wait and see what its competitors
did next to spur sales.
now, we're going to have to evaluate where the playing field is,"
said Paul Ballew, the company's chief sales analyst.
general, S.U.V.'s continue to gain in market share, but some shifting
has been under way toward smaller and medium-size S.U.V.'s and so-called
crossover utilities, which are engineered more like cars than pickups.
The market share of the largest S.U.V.'s held steady in 2002, but
now sales of some of them are in free fall.
February, sales of the Cadillac Escalade are down 28.8 percent compared
with a year ago. The Chevrolet Suburban is down 39.7 percent and
the Ford Excursion is down 24.3 percent.
Ford Explorer, smaller than those behemoths, is down 10 percent,
while sales of the company's smallest S.U.V., the Escape, are up
of full-size pickups also showed signs of weakness. The Chevrolet
Silverado is down 29.4 percent this year, while smaller pickups,
like the Ford Ranger, are up 8.8 percent.
large S.U.V.'s from foreign brands are also taking hits, with the
Mercedes M-Class down 28.6 percent this year.
G.M.'s sales of light trucks S.U.V.'s, pickups and minivans
have fallen 20 percent in the first two months of the year,
Honda's generally smaller light trucks are up 27 percent, with a
lift from sales of two new vehicles, the Pilot and the Element.
In addition, the Kia division of Hyundai has added the Sorento,
a small S.U.V., to the market in recent months.
Pipas, the chief sales analyst for Ford, said the shift toward smaller
trucks had been developing for some time and was probably affected
only at the fringes by rising gas prices. Of large S.U.V.'s, he
said, "The segment is large and is going to remain large for
several years to come, but as a percentage of the total vehicle
population, I see it declining."
groups welcome the shift in sales patterns.
people are starting to realize that zero percent financing on a
gas guzzler isn't such a deal in the first place," said David
Friedman, a senior analyst at the Union of Concerned Scientists,
an environmental group.
he added that it was premature to proclaim any broad victory of
environmental groups in altering consumers' purchasing decisions.
are a lot of pieces to the puzzle," he acknowledged.