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News > Companies
GM, Ford December sales up
January 5, 2000: 5:02 p.m. ET

Both beat expectations for last month, but consumer incentives still going strong
By Staff Writer Chris Isidore
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NEW YORK (CNNfn) - General Motors Corp. and Ford Motor Co. announced strong December sales Wednesday, capping a year in which the auto giants saw solid gains but lost market share to overseas competitors.
    December vehicle sales for GM were up 6.3 percent to 428,021, well above the 1 percent gain some analysts were expecting.
    A 21.5 percent jump in light truck sales in the month made up for a 7.2 percent decline in car sales; a drop blamed in part in fewer fleet sales in the month compared with a year ago.
    For the year, GM (GM) rebounded from its strike-plagued 1998 year to post a 9 percent gain in vehicle sales, crossing the 5-million mark. Car sales were up 5.5 percent to 2.6 million for the year, while light truck sales gained 12.8 percent to reach 2.4 million for the year.
    

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Photo Source: GM, via Wieck Photo

    Strong gains in sales of light trucks, such as the Sierra pickup, helped GM overcome a drop in car sales in December.
    

    GM hailed the shift to more truck sales in 1999 -- marking a company record for truck sales, which comprised 48.3 percent of total sales for the year compared with the year-ago figure of 46.7 percent of total sales.
    "We said we'd improve mix, we did, and we will continue to improve our mix in this highly competitive marketplace,Ē said a statement from Roy Roberts, a GM group vice president.
    Still, GM ended the year with a market share of less than 30 percent for the first time in a non-strike year since the 1920s, and analysts believe it will be leading the charge for higher consumer incentives in the first quarter. The company started mailing $500 coupons to millions of customers and prospects this month.
    "The climate of discounting is very much here, and I would expect it to increase as we head in to selling spring season," said Michael Pak, analyst with ING Barings. "In the case of GM, inventories are sort of high and the pressure to increase market share means they should be leading discounting charge."
    Still, Pak said if sales stay strong and the mix continues to lean toward the more profitable trucks, the incentives may not hurt profits.
    
Ford bucks trend with soft truck sales

    Ford (F) had record December and full-year U.S. sales, despite a 5.3 percent drop in truck sales in the month compared with a year earlier. That bucked a trend among other manufacturers, which saw truck-sales gains far exceed car-sales gains for the year.
    Fordís truck sales for the month were 192,915, compared with 203,652 a year ago. Most of that came from its Ford Ranger small pickup trucks model, which had a sales drop of 26 percent, compared with December 1998, to 19,417. And even though the Ford Explorer remained the nation's best selling sports utility vehicle, it saw a 9.5 percent fall in December sales and a 0.6 percent slide for the year.
    But a 17.6 percent gain in car sales to 140,842 allowed it to post an overall 6.3 percent gain to 333,757 vehicles sold.
    For the year, Ford saw a 4 percent gain in truck sales to 2.5 million, and a 9.4 percent gain in car sales to 1.7 million.
    "A strong economy, confident consumers, and innovative products were the major factors driving our record-breaking sales and earnings in 1999," said a statement from Bob Rewey, a Ford group vice president. "The good news is these factors are alive and well as we kick off 2000."
    

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Photo source: Ford Motor Co., via Wieck Photo

    The Ford Explorer was once again the country's top selling sports utility vehicle, but it saw a slight slide in sales for December and the year, as Ford showed soft sales numbers for its profitable light trucks.
    

    Pak also said he does not believe that investors will be too concerned with Ford's weak truck numbers.
    "The truck numbers are down, but I don't think the market will be worried about that too much given the pipeline of new (truck) products from Ford due very soon," said Pak. "Should the trend for Ford continue, as these new truck products get launched, then the market would be more concerned."
    Final market share numbers are not available in what was easily the best year for U.S. vehicle sales in history. But it is clear that the U.S. automakers lost ground to European and Korean imports as well as some Japanese manufacturers.
    "Everyone was up in volume, but if some are up more, it means redistribution of the market," said David Cole, director of the office for the study of automotive transportation at the University of Michigan. "The real growth has come from the Koreans and Europeans while the Big Three (GM, Ford and DaimlerChrysler) really suffered loss in market share."
    
Truck sales leads to Chrysler record

    On Tuesday evening, DaimlerChrysler announced a second-straight sales record for its U.S.-based brands of Chrysler, Plymouth, Dodge and Jeep. The components of the former Chrysler Corp. sold 2.6 million vehicles, up 8 percent from 1998. The company also set a December monthly sales record with 204,754 vehicles sold, 1 percent ahead of a year ago.
    The company saw car sales rise only 1 percent for the year, and saw a 4 percent drop in the number of minivans sold. The company increased incentives on its 2000-model minivans by $250 to $1,500.
    But a 21 percent gain in the sale of SUVs meant that truck sales were up 7 percent for the year, and represented more than two-and-a-half times the number of cars sold.
    GM's stock closed unchanged at 71-5/8 at the 4 p.m. close in New York Wednesday. Ford's stock was up 3/16 to 50 13/16, while the American Depository Receipts of DaimlerChrysler rose 5/8 to 74 7/8. Back to top

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