05-06-2005, 12:22 PM
The market slid early in the afternoon after Standard & Poor's cut the debt ratings of General Motors Corp. (NYSE:GM - News) and Ford Motor Co. (NYSE:F - News) to junk status. S&P cited brutal global competition and flagging sales of the automakers' most profitable vehicles.
05-07-2005, 01:29 PM
They will also be hurt by the popularity of the new Hybrid cars that neither of them thought would be in demand. Here is an interesting article.
May 3 (Bloomberg) -- General Motors Corp., the world's largest automaker,
said its U.S. sales of cars and trucks fell 3.9 percent in April from the
same month last year.
Earlier, Toyota Motor Corp. and Nissan Motor Co., Asia's two biggest
automakers, said U.S. sales of cars and trucks increased more than 25
percent last month, while Ford Motor Co.'s sales declined.
Toyota sold 210,466 vehicles last month, up 26 percent from a year ago.
Nissan sold 91,621 cars and trucks, a 32 percent gain, while Ford, the
second-biggest U.S. automaker, said sales fell 1.5 percent to 281,292.
DaimlerChrysler AG's sales gained 8.7 percent to 225,351 vehicles
Gains by Toyota and Nissan were projected to lift U.S. April auto sales to
an annual rate of 17 million cars and trucks from 16.6 million a year
earlier, according to a Bloomberg survey of analysts and economists. General
Motors Corp., the world's biggest automaker, was expected to report a sales
decline and a deeper drop in market share. GM reports later today.
``Ford and GM haven't been able to gain momentum this year and Chrysler is
doing well with new products,'' Rebecca Lindland, an analyst with Global
Insight in Boston, said in an interview. ``We expect the Asian automakers to
continue to gain market share overall, taking advantage of Ford and GM's
Toyota's gains were led by higher sales of hybrid Prius cars, which almost
tripled to a record 11,345. The cars combine an electric motor with a
Nissan's sales were lifted by its new Infiniti M luxury sedan, introduced
two months ago, and higher sales of light trucks, Jed Connelly, Nissan's
North American senior president, said in an interview.
``Strong'' sales of Nissan's Altima and Sentra cars and Murano sport-utility
vehicles helped sales gains, Connelly said.
Ford said sales of the midsize Explorer sport-utility vehicle fell 15
percent, and its large Expedition declined 20 percent. Sales of the small
Escape SUV, which is more fuel efficient, fell 15 percent.
The decline in SUV sales offset gains of full-size pickup trucks and some
car models. Ford recorded a 1.7 gain in F-Series pickups, the
highest-selling line of vehicles in the U.S. The automaker sold 71,367
F-Series trucks last month.
The company also had a 26 percent gain in Mustang sports cars to 19,559, the
highest April sales of the model since 1980, Ford said in the statement.
Chrysler sales rose 3.7 percent last year as nine new models, including its
300 sedan and the Grand Cherokee sport- utility vehicle, contributed to the
first annual market share gain in five years.
Chrysler Chief Executive Dieter Zetsche said in March that U.S. sales and
market share will gain again this year. Sales in the first four months of
this year have risen 7 percent.
Further sales declines for Ford and GM would put more pressure on the
automakers to reduce costs, cut production and take other steps to avoid
losses. Falling U.S. sales led to a first-quarter loss at GM and a 38
percent decline in profit at Ford. Shares of each company have fallen more
than 33 percent this year.
Industrywide U.S. auto sales fell 0.4 percent in the first quarter, paced by
5.2 percent declines at both Detroit-based GM, the world's largest
automaker, and Dearborn, Michigan-based Ford.
GM cited falling U.S. sales, mainly SUVs, for a $1.1 billion first-quarter
loss, its biggest quarterly loss since 1992. The company withdrew its
earnings forecast for the balance of the year. GM shares have fallen 32
percent this year through yesterday and are trading at 12-year lows.
Ford's falling sales contributed to a 38 percent decline in first-quarter
profit, to $1.21 billion. The company is now forecasting a likely
second-quarter loss and doesn't expect to make money on its car business
Chief Executive William Clay Ford Jr. said at an April 20 news conference
that the company's ``biggest opportunity for share'' will be when three new
mid-size car models, Fusion, Milan and Zephyr, ``hit the road.'' Those cars
won't be in dealer showrooms until October.
Toyota, the world's second-biggest automaker, is benefiting from demand for
hybrids, Scion small cars and redesigned Avalon sedans and Tacoma pickups.
The company also got a boost from Lexus, the best-selling luxury brand in
the U.S. A new GS sedan went on sale in February, and deliveries of the
Lexus RX 400h, a hybrid sport-utility vehicle, began April 18.
``They've gone into this year with a tremendous amount of momentum, and that
continues,'' said Jim Sanfilippo, executive vice president of Automotive
Marketing Consultants Inc. in Warren, Michigan.
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