More Sales Declines at GM, Ford - TheStreet

The two largest U.S. automakers continued to give way to foreign competitors with hefty sales declines in February, while

Daimler Chrysler


posted a 7.5% gain for the month.


General Motors

(GM) - Get Report



(F) - Get Report

posted sales declines, even in higher-margin trucks and SUVs.

GM, the world's largest automaker, said auto sales dropped 12.7% for the month, after a slight 1% increase in January. Analysts were expecting a decline of only about 5%. Meanwhile, Ford said sales tapered by 3%, marking its ninth straight month of lower sales. Its results beat Wall Steet's estimates, which called for a rougly 6% decline.

GM said its truck sales fell 9% while its car were down 17%. While some of its new products, like the Pontiac G6 and Chevrolet Cobalt, had good performances, the company acknowledged disappointment with the overall results.

"The calendar year is starting off slower than expected, both for GM and the industry," said Mark LaNeve, GM's vice president for North American sales, service and marketing.

Ford said truck sales fell 8%, while car sales rose 9%. It attributed the uptick in car sales to its two new sedans, the Ford Five-Hundred and Mercury Montego, and its redesigned Mustang launched last year.

Both companies lowered first-quarter production plans and announced second-quarter schedules below last year's levels, moves that will likely hurt revenue and profits. GM said it plans to produce 1.25 million vehicles in North America in the April-June period, down from 1.39 million vehicles a year ago. Ford said it plans to build 940,000 vehicles in North America in the second quarter, 11,000 fewer than a year ago.

Daimler Chrysler, in a show of strength, said car sales surged 21.1% while truck sales added 4%.

Among Detroit's foreign competitors, Japan's No. 1 automaker,


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said its U.S. sales rose 11% from a year ago, while



recorded a 10% increase, marking its best February on record.

"As gas prices continue their upward march, fuel efficiency catches the public eye," said Jim Press, executive vice president of Toyota Motor Sales USA Inc. "Our investment in a broad lineup of fuel-efficient vehicles continues to drive showroom traffic."