Truck, SUV sales spurt

0 Comments | Deseret News (Salt Lake City), Oct 4, 2006 | by Tom Krisher Associated Press

DETROIT -- Aided by big discounts and lower gasoline prices, sales of many trucks and sport utility vehicles edged up in September, but no one at the Big Three is ready to predict a return to the days when truck and SUV sales fueled huge profits.

The domestic trio -- Ford Motor Co., General Motors Corp. and DaimlerChrysler AG's Chrysler Group -- have long been criticized for relying too much on trucks and truck-based SUVs to make money, but in September they saw movement back toward their profit centers.

Toyota Motor Corp. also saw truck sales increase as it continued to trounce the Big Three by posting a 25 percent year-over-year sales gain.

Jesse Toprak, chief economist for Edmunds.com, a research site for car buyers, called the rise in SUV and truck sales a one-time phenomenon, saying that consumers don't believe gas prices will stay around $2 per gallon.

"Even if we have dips like this in gas prices, consumers are a lot more skeptical about the long-term trends in gas prices," Toprak said Tuesday.

Of the domestics, Ford saw the biggest sales increase, selling 4.7 percent more vehicles last month than in September 2005. The company attributed the increase largely to increased car sales.

But Ford also recorded a 2 percent increase in sales of F-series pickups, the largest-selling vehicle in North America. Sales of the Ford Explorer midsize SUV, which had been dropping this year, rose 21.9 percent.

Still, George Pipas, the company's U.S. sales analysis manager, stopped short of predicting an end to the midsize SUV's sales decline.

"To say stabilize might be stretching it, but I think that the rates of decline in these categories ... industrywide might not be so severe as they've been in the last 24 months," he said.

GM sold 334,025 vehicles last month, down 3.1 percent from a year ago, but the nation's largest automaker said much of the drop stemmed from its continued effort to wean itself off low-profit fleet sales to rental companies.

The company's car sales fell 6.4 percent, while trucks, including pickups and sport utility vehicles, were down 0.7 percent. The numbers include the European Saab brand.

DaimlerChrysler, based in Stuttgart, Germany, said its overall sales decrease of 2.3 percent stemmed mostly from its U.S. subsidiary, Chrysler Group, where sales fell 3.8 percent to 168,888. Sales of Mercedes-Benz vehicles rose 13.2 percent.

At Chrysler, car sales plunged 26.6 percent, while trucks rose 4.3 percent despite an air bag and seat belt recall that limited sales of the Dodge Ram pickup.

Ford's increase to 237,664 vehicles was fueled in part by a 26.2 percent increase in car sales, while its truck sales fell 5.5 percent. The figures are for all Ford brands, including Jaguar, Volvo and Land Rover.

Toyota sold 222,950 vehicles in September. Its car sales rose 18.4 percent, while truck sales soared 34.9 percent, the Japanese automaker reported Tuesday.

"They're this 800-pound gorilla out there that nobody can stop," said Erich Merkle, an analyst with Grand Rapids-based auto consulting company IRN Inc.

Sales of Toyota's Tundra pickup soared 74 percent to 12,609 units, but they were still far below the Ford F-Series, with 70,822 units sold, and the Chevrolet Silverado, with 51,964.

Toyota spokesman Xavier Dominicis said Tundra sales were in part fueled by fall incentives, aimed at making room for the 2007 model, which goes on sale in February. The offers vary by region, he said.

Toprak said Toyota and other manufacturers had large incentives on pickups and SUVs, which helped drive sales, especially for Toyota.

"Toyota's rally in the larger vehicle segment was mainly fueled by their unprecedented level of incentive spending," he said.

Honda Motor Co. reported a sales decrease of 4.1 percent to 116,226 vehicles, with cars falling 13 percent. But like Toyota, it had good news in the truck segment, with sales rising 11.6 percent.

Nissan Motor Co., which is currently in talks with GM about forming an alliance, said its sales slipped 5.6 percent to 88,340 last month. The figures include an 11.1 percent decrease for cars and a 2.7 percent increase for trucks.

GM predicted good results going forward, thanks to more fuel- efficient vehicles, and said its car sales were off in part because it had a low inventory.

Chrysler also touted new, more fuel-efficient offerings, including the Dodge Caliber and the Jeep Compass, as reason for optimism in the fourth quarter.

Although Ford posted a sales increase, Tuesday's numbers don't necessarily signal a turnaround for the struggling automaker. Ford had relatively weak sales in September 2005 after summer sales were boosted by deep discounts and Hurricane Katrina pushed gas prices higher.

Ford said demand for its midsize cars -- the Ford Fusion, Mercury Milan and Lincoln MKZ -- and for the Mustang remained strong, and sales of the F-Series pickup and Explorer and Expedition SUVs all showed higher sales compared with September 2005.

Contributing: Sarah Karush