3rd UPDATE: US Auto Sales Lifted By Late Surge; GM Hopeful
01 April 2009 - 11:50PM
Dow Jones News
New incentives drove an increase in U.S. auto sales in the final
week of March, though companies' executives remained split over
whether the prolonged market slump has bottomed.
The top five manufacturers all registered smaller year-over-year
declines in sales of cars and light vehicles during March,
according to reports Wednesday. The improvement left the seasonally
adjusted annualized sales rate, or SAAR, at 9.86 million for the
month, according to Autodata Corp. This was ahead of analysts'
estimates and the 9.12 million reported for February.
Executives from General Motors Co. (GM) were the most optimistic
about the outlook as the company registered a month-on-month
improvement despite a 45% decline compared with March last
year.
"We're seeing some stability in the overall SAAR," said GM sales
analyst Mike DiGiovanni on a conference call, noting "the first
signs of brightening."
His remarks were echoed by Toyota Motor Co. (TM), whose own U.S.
sales fell 39% last month. "We are seeing some optimism returning
to the market," said group Vice President Bob Carter on a
conference call.
Executives at Ford Motor Co. (F) were more cautious, and said
that it is too early to call a bottom, though economic indicators
suggested improved demand would emerge in around three months.
Ford's sales fell 41% last month.
Auto manufacturers said March would have been far weaker but for
a late boost in business as a raft of new incentives were rolled
out, a process that has continued this week. Average incentives
rose 30.1% to a record $3,169 per vehicle last month, according to
Edmunds.com, an online retailer.
Mark LeNeve, GM's vice president for North American sales,
reiterated that traditional discounts and rebates had less traction
than normal, driving companies to innovate. LeNeve added that
industry sales typically climbed 21% between March and February,
and in fact rose 23% this year. He said any deviation "would have
meant that normal seasonal patterns were broken and that the
consumer was completely freaked out."
GM faces a 60-day deadline to either develop a new restructuring
plan and secure concessions from unions and creditors or else face
being pushed into bankruptcy protection by the Obama
administration. LeNeve said the March data had no bearing on its
ability to meet the timetable.
Auto manufacturers have cut capacity, costs and inventory in the
wake of the global slowdown in demand caused by weak economies and
tight credit. However, they need to stimulate demand to lift
utilization rates and boost cash flow.
In Europe, where sales fell by a quarter in February, there were
also signs that incentives had halted the slide last month, with
France reporting an 8.1% rise in registrations after a five-month
run of year-on-year declines.
GM shares seesawed during its call. The stock closed down 1 cent
at $1.93 but rose 1.6% to $1.96 in recent late trading. Ford stock
closed up 4.2% at $2.74 while Toyota's American depositary shares
rose 7.3% to $67.90. Both stocks are unchanged in recent
after-hours trading.
-By Doug Cameron, Dow Jones Newswires; 312-750-4135;
doug.cameron@dowjones.com
(Mike Barris, Jeff Bennett and Kate Linebaugh contributed to
this report.)