By SHOLNN FREEMAN
Staff Reporter of THE WALL STREET JOURNAL
DETROIT -- U.S. consumers, drawn by a smorgasbord of cash and
financing deals served up by auto companies, continued to buy new
cars and trucks at a record pace in September.
According to preliminary figures from Autodata Crop., the seasonally
adjusted annualized selling rate rose 3.8% to 17,910,000 from
17,250,000 a year ago. But the U.S. auto market's boom, which some
industry officials now think could hit a new record for all of 2000,
remained uneven. General Motors Corp. lost ground again in
September, while several major European and Japanese auto makers'
sales gains outpaced those of the U.S. Big Three.
Detroit's Big Three are offering more discount
deals in an intensifying fight to hold their
ground, particularly in the profitable pickup,
sport-utility vehicle and minivan segments,
where European and Japanese companies are
stepping up their assaults. Honda Motor Co.
boosted sales 13% in September, led by a 29%
increase in minivan and SUV sales. Volkswagen
AG's U.S. sales including Audi jumped 9.5%.
But at GM, the No. 1 U.S. auto maker, company
executives struggled to explain why September sales slipped 3.3% from
a year earlier to 414,530 vehicles. Sales of GM's profitable light trucks
skidded 10%, while car sales rose 3%. GM common shares fell $1.25 to
$65.88 in 4 p.m. New York Stock Exchange composite trading Tuesday.
GM on Monday announced new rounds of discounts to spur sales of
several slow-selling models, including an unusual "triple zero" incentive
in most states offering zero cash down, zero payments and zero
interest for a year on all 2000 and 2001 Oldsmobile models.
As the competitive crunch got more intense, officials at U.S. auto
companies blamed each other for discounting to prop up sales. Bill
Lovejoy, GM's group vice president of North American vehicle sales, said
he was "dismayed" at levels of incentives of competitors and said that
he didn't see how the fourth quarter would get any easier, given
incentive spending of competitors in the third quarter.
Discounts From Ford
Ford Motor Co. announced a raft of new cash and financing incentives
on many of the models in its 2001 lineup. Ford also said it would now
offer cash discounts of $1,000 on its 2001 Explorer and Windstar
minivan. Explorer sales held up despite the bad news surrounding the
recall of 6.5 million Firestone tires, mostly mounted on the Explorer.
Ford said it sold 34,510 Explorers, up 1.1% from a year ago. Overall,
Ford's September sales rose 3.4% to 339,458 cars and trucks.
Ford spokeswoman Carolyn Brown said Ford's discounts are no more
than what rivals are offering. "It's a competitive marketplace," she said.
"When one person starts to make changes it does have an impact."
Ford Group Vice President for Global Consumer Services Bob Rewey
cautioned that "in the coming months, sales will be hampered by low
inventories resulting from three weeks of plant shutdowns" ordered to
free up more tires to replace recalled Firestones.
Help From Escape SUV
Ford also got a boost from its new Escape SUV, which sold strongly,
even though advertising in the month was limited to the Internet and
word-of-mouth buzz. But Ford has been discounting other models
heavily to maintain sales. Ford shares fell 44 cents Tuesday to $25.63 in
DaimlerChrysler AG's sales, excluding Mercedes brands, rose 5% to
219,966 in September, following the company's move to place heavy
incentives on leftover 2000 models to make room for new 2001-model
minivans and Jeeps. Sales of Dodge and Chrysler minivans jumped 56%
from a year ago, but Chrysler Group cars plunged 26%.
DaimlerChrysler's Mercedes brands improved September sales by almost
13% to a new record for the month of 16,952 vehicles. The redesigned
Mercedes C-class cars rose 35% from a year earlier.
GM sales analyst Paul Ballew predicted sales for all of 2000 could hit
record 18 million light and heavy vehicles.
"There are terrific buys out there," said Charlie Thomas, one of Ford's
top dealers in Houston. "The manufacturers have all sorts of incentives
on everything. The American and foreign manufacturers do what needs
to be done. What sells a car is a value."
Write to Sholnn Freeman at email@example.com