Sales of Detroit trucks stalled in September as
spiking gas prices sped up a consumer shift toward more
fuel-efficient vehicles.
In the first look at sales since Hurricane Katrina
drove gasoline pump prices to $3 a gallon and beyond,
sales of passenger cars grew last month while large,
fuel-thirsty sport-utility vehicles languished. Overall,
industry sales in September slid 7.6 percent from a year
ago.
General Motors
Corp. reported a sales drop of 24 percent compared
with the same month a year ago. Ford Motor Co.'s sales
declined 20 percent. DaimlerChrysler Corp., the
Detroit-based division of DaimlerChrysler AG, bucked the
trend with a 4 percent gain in sales. The big Japanese
automakers reported even stronger U.S. sales in September,
with most posting increases of 10 to 12 percent, as
consumers snapped up Japanese passenger cars and smaller
trucks.
The month could prove to be a turning point as
consumers gird for the long-term effects of high gas
prices, said auto marketing analyst Art Spinella of CNW
Marketing Research Inc. in Bandon, Ore. "The market
changed as it often does. Frequently that means Detroit
gets left behind. It never fails."
Yesterday Standard & Poor's put both Ford and GM
under review for possible downgrade of their credit
ratings out of concern over competitive pressures.
Hurricanes Katrina and Rita heavily damaged oil
production in the Gulf of Mexico. The storms crippled
refineries that turn oil into gasoline. This has tightened
the supply of gasoline, causing pump prices to spike.
According to the Energy Department, the average national
price for a gallon of unleaded gasoline is nearly $2.94.
That's up 12.4 cents from a week ago. Gas pump prices are
up 99 cents from a year ago.
In calls with reporters and financial analysts
yesterday, Ford and GM officials played down the impact of
higher gas prices on sales. Sales officials from both
companies said the September slump was the result of
"payback" from this summer's blockbuster employee-pricing
deals. The deals drove sales for Detroit automakers to
their highest levels in years as consumers seized the
opportunity to pay the same discounted price as company
employees. After all the summer selling, GM and Ford said
they had limited inventory for consumers to pick through,
causing sales to fall last month.
Paul Ballew, GM's chief sales analyst, described
GM's September sales as "comforting" and "consistent with
what we expected."
But Spinella said Detroit has a perception problem
among consumers who are not aware that U.S. automakers
offer many fuel-efficient sedans and small cars. Instead,
customers are buying the few hybrid cars on the market as
well as smaller cars and little sport-utility vehicles
from import companies.
At Honda, sales of the Civic, one of the industry's
most popular small cars, grew 37 percent from a year ago.
Honda reported a 25 percent sales increase in the
gasoline-electric hybrid version of the Civic. Sales of
the hybrid Toyota Prius nearly doubled, to 8,193 for the
month.
Chrysler's performance was helped by a 69 percent
increase in sales of the Dodge Neon, a car that the
automaker is phasing out and barely marketing. At GM,
sales of the Chevrolet Malibu rose 25 percent while sales
of the Korean-built Aveo subcompact car were up 25
percent.
At Ford, trucks and SUVs -- the backbone of the
company's sales and profits -- struggled through
September. Sales of F-Series pickup trucks plunged 30
percent. Sales of Ford's large SUVs, including the Ford
Explorer and Expedition and the Lincoln Navigator, sank by
more than 55 percent each. At GM, overall sales of trucks,
minivans and SUVs dropped 30 percent. Truck, SUV and
minivan sales also fell at Toyota and Honda, as well as at
Chrysler.
The heat is being felt on Capitol Hill. Last month,
Sen. Barack Obama (D-Ill.) offered a proposal to raise
federal fuel-economy standards in cars and trucks by 3
percent a year in exchange for the federal government
picking up the costs of retiree health care. Detroit
automakers say the costs are a crippling burden in
competition with foreign rivals.
Ford chairman and chief executive William Clay Ford
Jr. sent a letter last month asking the Bush
administration to convene a summit of automakers,
suppliers and oil companies to find a solution to the
nation's energy woes. Mike Jackson, chairman and chief
executive of AutoNation Inc., the nation's largest
publicly traded dealer group, is calling for a yearly
increase of 10 cents per gallon in the gasoline tax over
the next decade. Americans already pay an average of about
44 cents per gallon in combined local, state and federal
taxes.
Rep. Sherwood L. Boehlert (R-N.Y.), chairman of the
House Science Committee, said the atmosphere on Capitol
Hill for increasing vehicle fuel-efficiency standards is
as good as it has been in years. He said he would try to
tack a fuel-efficiency amendment onto energy legislation
currently moving through Congress, possibly as early as
this week. Even though similar efforts have failed in the
past, he said Hurricane Katrina has changed the dynamic.
Congressmen are hearing from the people back home,
Boehlert said.
"Faxes are on overdrive," he said. "Phones are
ringing off the hook, and the mail is coming in by the ton
on Capitol Hill: Do something about the high price of
gasoline."