Weak vehicle sales forecast

first_img “The programs were more about ‘reallocating sales’ than stimulating demand,” Barry said in a research note. The automakers returned to incentives at the end of the year, although after the summer’s deals, they had less effect than in previous years. Analysts said the biggest change in 2005 was a shift toward cars and away from trucks. “This shift has been especially prominent in (the) last four months as September’s hurricanes and $3/gallon gasoline served as a turning point in consumer preference,” Murphy noted, adding that if it continues, the trend could accelerate the market share loss of GM, Ford and Chrysler. The domestic Big Three rely on SUVs and other light trucks for the majority of their sales. The Big Three are banking on new-vehicle introductions to stop the migration of customers to foreign competitors such as Toyota Motor Corp., Honda Motor Co. and Hyundai Motor Co. Healy said he expected GM, Ford and Chrysler to continue to lose market share in 2006, though at a far slower rate. Higher short- and medium-term interest rates will make financing a car more expensive next year, but that’s not likely to have a dramatic effect on vehicle sales given the strength of the economy, he said. GM shares rose 41 cents to close at $19.42 Friday on the New York Stock Exchange. Ford shares fell 9 cents to close at $7.72, and DaimlerChrysler’s U.S. shares fell 55 cents to close at $51.03. 160Want local news?Sign up for the Localist and stay informed Something went wrong. Please try again.subscribeCongratulations! You’re all set! AD Quality Auto 360p 720p 1080p Top articles1/5READ MORERose Parade grand marshal Rita Moreno talks New Year’s Day outfit and ‘West Side Story’ remake General Motors Corp., Ford Motor Co. and DaimlerChrysler AG’s Chrysler Group had a combined U.S. year-to-date market share of 57 percent at the end of November, down from 60 percent two years before. Robert Barry, an analyst with Goldman Sachs, estimated their December market share at 54.5 percent, down from 58.1 percent last year. Early numbers released midmonth indicated that sales got off to a slow start in December, traditionally a time of brisk sales thanks to year-end deals. U.S. sales were down 14 percent for the first 11 days of the month, according to the Power Information Network, a division of the marketing research and consulting firm, J.D. Power, and Associates. Though the pace picked up later, analysts John Murphy of Merrill Lynch and David Healy of Burnham Securities, both predicted December sales would be 5 percent below year-ago levels. GM, Ford and Chrysler saw sales soar to near-record levels this summer with discounts that let consumers pay the employee price. But sales plummeted as soon as the discounts expired in October. DETROIT – A lackluster December was expected to cap a dismal year for U.S. automakers, who saw Asian competitors eat away at their market share throughout 2005. Analysts are forecasting a weaker month than December 2004, as the impact of traditional year-end deals was muted by deep discounts over the summer. However, the month’s sales are likely to be vastly improved from the autumn slump that followed the end of the summer’s promotions. Automakers are scheduled to report December results on Wednesday. Full-year sales were expected to be essentially flat, but with market share losses for the Big Three, whose best sellers – gas-guzzling trucks – fell out of favor. last_img

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