Chrysler, Ford tumble as U.S. auto sales drop
DETROIT (Reuters) - Chrysler LLC and Ford Motor Co (F.N) on Thursday reported double-digit drops in October sales, lagging rivals in a slumping U.S. market widely expected to remain under pressure into next year.
Chrysler, which also announced plans to slash one-fifth of its factory work force and cut four slow-selling models, posted a 12 percent drop in monthly sales that was deeper than analysts had forecast.
Ford recorded a 13 percent monthly decline, reflecting a cutback in low-margin sales to car rental agencies as part of its own ongoing restructuring aimed at restoring its U.S. operations to profitability.
By contrast, Toyota Motor Corp (7203.T) snapped out of a quarter-long slump to post a slight gain in U.S. sales, eclipsing Ford to hold onto the No. 2 spot in the world's largest vehicle market.
Sales for industry-leader General Motors Corp (GM.N) were down almost 1 percent for October, outperforming a broad market it said had likely contracted almost 4 percent.
Major automakers said the slumping U.S. housing market, higher gas prices and wildfires in California had all combined to crimp sales in October despite signs that vehicle demand had steadied from an even rockier summer.
"I think it's fair to describe the industry as facing a number of challenges and that's showing up in performance," said GM chief sales analyst Paul Ballew.
Toyota squeaked out a gain of less than 1 percent, snapping a three-month streak of lower sales as showroom traffic in the Midwest and elsewhere offset a continued slump in California.
Honda Motor Co (7267.T) reported almost flat results, with October sales off 0.2 percent. Nissan Motor Co Ltd (7201.T) bucked the downtrend to post an almost 9 percent sales gain.
The Ford sales decline was largely in line with cautious Wall Street expectations. The automaker said it had held retail market share around the 13 percent level it has built into its turnaround plan.
But Chrysler said its weak October results underscored the need for the sweeping cost-cutting it unveiled on Monday. The accelerated restructuring plan marked the first major strategic overhaul since the automaker was taken private by Cerberus Capital Management CBS.UL in August.
"We're seeing growing concern about the housing slump showing up in consumers' expectations about future economic conditions and that's showing up in auto sales," said Darryl Jackson, Chrysler's vice-president of U.S. sales.
CALIFORNIA IN FOCUS
The October results underscored the importance of sales in California for Japanese brands such as Toyota, which dominate sales in the most populous U.S. state and the largest single market for new cars and trucks.
"In Southern California, wildfires crimped a key market already impacted by the housing downturn," said Jim Lentz, Toyota's executive vice president of U.S. sales. Continued...
