GM, Ford post lower US sales

DETROIT - General Motors and Ford today posted big declines in US vehicle sales in September as employee pricing discount programmes lost their allure and sales of traditional SUVs plunged on higher petrol prices after hurricanes ravaged the US Gulf Coast.

And US automakers don't see sales getting any better this month as the generous summer deals pulled fall and winter customers into the market earlier.

"I expect October to be a bit rocky," Paul Ballew, GM's head of global market and industry analysis, said, adding that industry sales on a seasonally adjusted annual basis will be around 16.4 million vehicles in September.

By contrast, Asian rivals Toyota Motor Corp, Honda Motor Co Ltd and Nissan Motor Corp posted double-digit gains, and Toyota said its third-quarter sales were the best-ever in the United States.

"Detroit has been trying to stimulate sales, basically pull sales from the future, by reducing prices while their competitors overseas have focused on producing better products," said Thomas Leritz, portfolio manager with Argent Capital Management in Clayton, Missouri.

"It's history repeating itself," he added. "You go back to the '70s, during those oil shocks the Japanese took market share."

Japanese automakers have been relentlessly increasing their share of the US market, stealing sales from Ford and GM, which have been struggling with issues ranging from excess inventory to a shift in consumer taste away from larger sport utility vehicles.

The September sales decline casts another shadow over the two largest US automakers, which face mounting financial hardships.

GM, which since June 1 has been selling 2005 model-year vehicles at the same low prices it offers to employees, saw its September sales fall 24 per cent, and Ford said its sales dropped 20 per cent after a two-month gain.

But in a bright spot for Detroit, the US-based Chrysler unit of Germany's DaimlerChrysler said September sales rose 4 per cent.

Both Ford and Chrysler followed GM's lead in offering employee discounts.

All sales figures are adjusted for the number of selling days and exclude the automakers' foreign brands.

Analyst Jesse Toprak of consumer research firm Edmunds.com said the US automakers' sales decline were not surprising because of the "pay back" effect following their strong performance earlier in the summer and low inventory levels, which have affected availability on some model lines.

"The summer clearance we usually see in September occurred in July and August this year," Toprak said.

Exceptionally strong sales in any one month can weigh on near-term future demand, commonly referred to as the "pull-ahead" or "payback" effect.

Nissan's sales in September jumped 16 per cent, meanwhile, and Toyota's sales were up 10 per cent. Rival Honda saw its sales increase about 12 per cent.

Sales of large gas-guzzling SUVs for GM and Ford declined significantly last month as US petrol prices soared well over US$3 ($4.38) a gallon in many parts of the country.

"There is legitimate pressure on some utility categories and I would describe those as the traditional truck-based utilities," GM's Ballew said.

SUV and truck sales at GM were off 30 per cent. Sales of its large Chevrolet Suburban SUV were down nearly 57 per cent.

Sales of traditional SUVs at Ford were off 51 per cent compared with last September. Sales of Ford's large Expedition SUV fell 60 per cent, while its mid-size Explorer was down 58 per cent. Its F-Series pickup trucks were down 30 per cent.

Edmunds.com's Toprak said he expected sales of large SUVs from US automakers to fall further this year.

- REUTERS