This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Ford, GM Take Hit in Compact Segments

Stocks in this article: F GM HMC TM

DETROIT ( TheStreet) -- Ford (F - Get Report)and GM (GM - Get Report) both reported disappointments in select small car segments on Tuesday, as Japanese automakers returned aggressively to the market.

But even though Detroit's two publicly held automakers reported overall sales declines, with Ford down 5% and GM down 8.2% as Toyota (TM - Get Report) gained 11.6%, investors did not seem overly perturbed. GM shares were rising 35 cents to $23.35 in mid-afternoon trading Tuesday, while Ford shares were flat at $11.27.

"There's no doubt the Japanese are back in the market," said Don Johnson, vice president of U.S. sales operations, on the GM sales call. "They have a high inventory and they're being aggressive in the fleet business."

Between March and April, Ford cut incentive spending by 9.9%, the second biggest drop in the industry, according to TrueCar.com. Nissan cut by 10.7%, while GM cut by 3.4%. Only Honda (HMC - Get Report) and Toyota boosted incentive spending, with Honda up 8% and Toyota up 4%, TrueCar said. Chrysler was down 6.1% while the industry average declined 4.7% to $2,446.

Among compacts, sales of the Chevrolet Cruze dropped 28% to 18,205, while sales of the Toyota Corolla gained 15%to 24,804.

Cruze was perhaps the single biggest beneficiary of production slumps by Japanese automakers following the March 8 earthquake and tsunami.

"The compact car segment is obviously a very competitive segment," said Alan Batey, Chevrolet vice president for sales, on the sales call. "What we have done from day one is to position Cruze from a value perspective (and) we are not being drawn into a discounted sales position." He noted that the average transaction price for Cruze is $19,572, while the average transaction price for a Corolla is $16,917.

Meanwhile, sales of the subcompact Chevrolet Sonic, which was not available in April 2011, totaled 6,387. At least in the early part of the month, Sonic was the top-selling subcompact, Batey said.

At Ford, the big loser was the subcompact Fiesta. Its sales fell by 44% to 5,135, while sales of the Toyota Yaris climbed 142% to 4,274. Meanwhile, sales of the compact Focus gained 12.5% to 19,425.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Jim Cramer and Stephanie Link reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

Jim Cramer's protégé, David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
Try it NOW
Try it NOW
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

Jim Cramer's protégé, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,164.95 -251.90 -1.45%
S&P 500 1,994.99 -26.26 -1.30%
NASDAQ 4,635.24 -48.1670 -1.03%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs