DETROIT – Auto sales got off to a slow start in December, and early numbers indicate U.S. automakers continued to lose market share to Asian rivals despite holiday discounts, auto analysts said Monday.
Overall U.S. sales were down 14 percent in the first 11 days of December compared with this time last year, according to the Power Information Network, a division of the marketing research and consulting firm J.D. Power and Associates. Every major automaker except BMW AG saw sales decline. Automakers plan to release their full December results Jan. 4.
Bob Schnorbus, chief economist of global forecasting at J.D. Power, cautioned that December 2004 was an exceptionally strong month, making comparisons to this year difficult. Year-end incentives fueled last year’s blockbuster sales, but this year, those incentives packed less punch because of the popular employee-discount programs that were offered all summer.
General Motors Corp., Ford Motor Co. and DaimlerChrysler AG’s Chrysler Group saw their sales rise to near-record highs in July when they let customers pay the employee price, but their sales plummeted in October after the discounts ended. Asian automakers have seen fewer fluctuations because they didn’t offer employee discounts.
Perhaps the most discouraging news for U.S. automakers is that they continued to lose market share in early December despite launching a new round of discounts last month. Chrysler is offering free gas and extended warranties, while GM and Ford are posting no-haggle prices on their vehicles. Asian automakers also are offering deals, although they generally spend far less on incentives.
The Big Three U.S. automakers had a combined U.S. market share of 50.1 percent in the first 11 days of December, compared with 53.6 percent at this time last year.
South Korean automaker Hyundai Motor Co. also was losing share, while Japanese automaker Nissan Motor Co.’s sales were flat, the Power Information Network said. Toyota Motor Corp. and Honda Motor Co. saw their combined U.S. market share increase to 28.9 percent, from 26 percent last year.
Himanshu Patel, an auto analyst with JPMorgan Chase &Co., said that while this December looks weak compared with last year, it will be an improvement over October and November as the hangover from the employee-discount deals continues to wear off. He also predicted GM’s market share will see an uptick in the first part of 2006 as new vehicles hit the market.
“We expect Big Three year-over-year sales declines to continue, but at a slower pace than in recent months,” Patel wrote in a note to investors.
GM shares were down 84 cents, or nearly 4 percent, to close at $21.05 on the New York Stock Exchange. Ford shares were down 7 cents to close at $8.23, and DaimlerChrysler shares were up 14 cents to close at $51.08.
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