GM, Ford to limit production

  • Associated Press
  • Wednesday, September 1, 2004 9:00pm
  • Business

DETROIT – General Motors Corp. and Ford Motor Co. reported disappointing U.S. sales Wednesday, prompting the nation’s two largest automakers to cut planned vehicle production in the fourth quarter, which could hurt profits.

The sluggishness, however, wasn’t felt among all major carmakers reporting August results. Nissan, Suzuki, BMW and Volvo were among the foreign brands posting sizable sales increases.

GM, the world’s No. 1 automaker, said overall business was down 7 percent from a record-setting August 2003. Car sales were off 2 percent, while truck sales fell 10 percent.

Percentages are adjusted and based on the daily sales rate. There were 25 selling days last month and 27 in August 2003.

“Comparisons to our record sales of last year are tough,” said John Smith, GM’s group vice president for North American sales, service and marketing. “Still, our sales last month fell somewhat short of our expectations.”

No. 2 Ford also had a sub-par month, saying overall sales of its Ford, Lincoln and Mercury brands fell 5.9 percent, again pulled down on the car side. Car sales were off 22 percent. Truck sales grew 1 percent.

But Nissan Motor Co.’s U.S. arm, which continues to grab more domestic market share, said its sales so far this year are up nearly 23 percent from a year ago.

“Nissan and Infiniti are both performing very strongly in a difficult industry with a lot of competitive and incentive pressures,” said Jed Connelly, senior vice president of sales and marketing for Nissan North America.

Ford is experiencing a drop in car demand as it prepares for the launch later this year of new models such as the Ford Five-Hundred sedan and the redesigned Mustang.

Ford has dubbed 2004 the “year of the car,” but its trucks and sport utility vehicles have carried the load so far. Sales of F-Series trucks, the nation’s best-selling vehicles, rose for the 12th consecutive month in August, coinciding with the introduction of the new F-150 model in September 2003.

GM also hopes to propel sales in the final months of 2004 with the release of several new products, including cars such as the Chevrolet Cobalt, which will replace the high-volume Cavalier; the Buick LaCrosse premium midsize sedan; and the Pontiac G6 performance midsize sedan.

For now, though, to help relieve a backlog of cars and trucks, both companies plan to make fewer vehicles in the fourth quarter than they did a year ago.

GM on Wednesday set its initial fourth-quarter production forecast at 1.29 million vehicles, 6.8 percent less than a year ago. Ford said it plans to build 830,000 vehicles in the fourth quarter, down from 900,000 in the year-ago period. That in turn could affect profits: Automakers consider a vehicle sold when it’s shipped from the factory to a dealer, not when the dealer reaches an agreement with a buyer.

Associated Press

The Palm Chevrolet and Oldsmobile dealership in Punta Gorda, Fla., continued to operate on Friday despite damage caused by Hurricane Charley. The diminishing effectiveness of consumer incentives nationwide contributed to a slump in new car and truck sales in August.

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