Vehicle sales slowed in December for two of the Big Three automakers following back-to-back strong months in which interest-free financing arrangements created a buying frenzy for new cars and trucks.
Still, each of the Detroit-area automakers posted increases from the same month a year ago.
said total vehicle sales in December rose 7% from the same month last year. GM's sales climbed 14% in November and 31% in October. Car sales fell 19.1% last month, but truck sales rose 31.3%.
said sales rose 2% in December, down from a 4.4% increase in November and a 35% jump in October. Truck sales were up 14.9%, and car sales slid 19.7%.
Chrysler, the U.S. unit of
, said total vehicles rose 6% in December. Car sales dropped 3%, and truck sales climbed 9%. Unlike its two chief rivals, Chrysler actually reversed its performance of November, when car and truck sales dropped 5.8%. The company had the worst performance of the three in the previous two months, and posted only a modest, comparatively speaking, 5% increase in October sales.
In afternoon trading on the
New York Stock Exchange, GM was gaining 1.1% to $49.16. Ford was up 3.6% to $16.80, and DaimlerChrysler was ahead by 2.2% to $44.43.
Annualized U.S. light vehicle sales were expected to fall 3.3% in December to 15.1 million units, compared with record sales of 21.3 million in October, and 17.8 million in November, according to Scott Hill, a Sanford Bernstein analyst.
GM, which has been the biggest beneficiary of the 0% financing enticement, has ended that incentive but is replacing it with cold, hard cash. The company now plans to offer a $2,002 cash rebate on the purchase or lease of most 2001 and 2002 cars and trucks through Feb. 28. Ford and Chrysler haven't said how they might respond.
Hill estimates that GM could save $300 to $500 per vehicle with the new rebate program. The company has already successfully used the financing offer to
take market share from its main rivals, and it shows no sign of easing its campaign to convince consumers to buy a new set of wheels.
Analysts estimate that hefty vehicle buying in October and November stole sales from next year, and even from December. Ford projected today that industry sales would total 15.5 million in 2002.
GM was the first vehicle maker to begin offering the financing incentive in September. With the economy weak, and with consumer demand appearing threatened by the terrorist attacks of Sept. 11, Ford and Chrysler were forced to follow suit. The deals were then repeatedly extended as competition in the industry intensified and buyers kept milling around lots. GM's financing program expired Jan. 1, Chrysler's ends Jan. 8, and Ford's wraps up Jan. 14.
"They got to the point where they said, 'We're in danger. If we keep pushing, we could put ourselves in the ditch as well,'" Hill said. "They were worried that the forward market would become so small that they're not making any profit either."