News > Jobs & Economy
    SAVE   |   EMAIL   |   PRINT   |   RSS  
Gas prices put brakes on auto sales
Ford, GM see sharp drop in sales of pickups, SUVs after strong summer; Chrysler sales edge up.
October 3, 2005: 4:07 PM EDT
By Chris Isidore, CNN/Money senior writer

NEW YORK (CNN/Money) - Record high gasoline prices and empty dealer lots combined to send sales tumbling at General Motors and Ford last month as the automakers' earlier popular sales promotions caught up with them.

Tough comparisons with strong results a year ago were also a factor, industry executives said.

GM (Research), the world's biggest automaker, said U.S. sales overall sank 24 percent to 344,797 vehicles in September.

Sales of light trucks, which include pickups, sport/utility vehicles and vans, plummeted even more, falling 30 percent from a year earlier, while car sales declined 14.5 percent.

Ford (Research), the nation's No. 2 automaker, said September sales overall sank 19 percent to 228,157 vehicles.

Ford's sales of light trucks fell even more sharply, sinking 27 percent to 155,167.

Executives at the two automakers placed more of the blame for September results on depleted inventories of 2005 models due to the success of the summer "employee pricing" offers on older models.

"We knew going into September that it would be challenging given continued inventory constraints and compared to exceptionally strong year-ago results," GM vice president Mark LaNeve said in a statement.

George Pipas, head of sales analysis for Ford, said the 30 percent decline in sales for the company's F-series pickup truck, the single best-selling vehicle in the nation, brought the vehicle back near normal sales levels for the month.

He said near-record sales of the pickup in September 2004, when it offered zero-interest financing for six years on the truck, made comparisons difficult.

"I don't think high gas prices have had a significant impact on this segment and I think the segment will hold up well," he said.

But Pipas and Paul Ballew, GM's executive director of global market and industry analysis, both admitted that high gas prices were hitting sales in the SUV segment, although they said it was tough to quantify.

Sales of the Explorer, the nation's best-selling SUV, plunged nearly 58 percent. GM's best-selling SUV, the Chevy TrailBlazer, had sales fall 24 percent, while the larger Chevy Tahoe saw sales plunge 56 percent.

"We realize that gas prices are important to consumers and we're certainly not denying that there's an impact," said Ballew. "We are seeing more interest in consumers understanding fuel economy of vehicles. But there's not the shift we saw in the 70's and 80's."

Japanese models, hybrids gain

Still, as happened during the 1970s gas crisis, U.S. sales for Toyota and Honda did pick up.

Toyota Motor Corp. (Research), the world's No. 2 automaker and No. 4 in U.S. sales, reported its best September, with sales of 178,417 vehicles, an increase of 10.3 percent from a year earlier. Honda Motor Corp. (Research) saw its sales rise 11.7 percent to 121,163 in the month, also setting a company record.

The Toyota Prius, the gas-electric hybrid which has become one of the leading symbols of a more fuel efficient vehicle, saw sales up 90 percent from a year earlier, although total sales were still small -- 8,193, making it a niche vehicle. And the pickup in Prius sales did not make up for a 16.6 percent fall in SUV sales at Toyota in the period.

Ford's Escape, a small SUV which is available in a gas-electric hybrid version, was one of the few light trucks at Ford not to see sales fall more than 10 percent. Its sales fell 4 percent. Ford said it sold 1,808 Escape hybrids last month out of a total of 12,052 sold.

Ford did see sales of its car models edge up 3 percent in the month. But cars constitute less than a third of Ford's overall sales.

And some of those gains may have been because of strong sales to businesses and car rental companies, rather than to consumers.

Pipas said the overall sales numbers for the industry for the month, while showing a decrease, may actually be weaker than they initially appear due to strong sales to corporate customers.

Competitor Chrysler Group, the part of DaimlerChrysler (Research) which includes the Chrysler, Dodge and Jeep brands, said its sales rose four percent from a year earlier.

Chysler Group sales bucked the trend of slowing truck sales. Sales of the Dodge Ram pick-up rose four prercent from the same month last year. Sales of Jeep vehicles also increased.

Small car sales rose 39 percent from last year. The Dodge Neon, which was ended production last week, had a record month with sales up 69 percent from September 2004. Sales for large cars, like the Chrysler 300 and Dodge Charger, also increased.

But even with that gain from September 2004, Chrysler's September sales sank 6 percent form the strong pace in August.  Top of page

Auto Sales
Oil and Gas
Manage alerts | What is this?