February auto sales tumble, Detroit hit hardest

By Ben Klayman and Kevin Krolicki

DETROIT (Reuters) - U.S. auto sales tumbled in February in the face of a slumping economy and high gas prices with double-digit declines by all three struggling Detroit-based automakers.

Sales at General Motors Corp(GM.N: Quote, Profile, Research, Stock Buzz), Ford Motor Co (F.N: Quote, Profile, Research, Stock Buzz) and Chrysler LLC CBS.UL fell 16 percent, 10 percent and 17 percent, respectively. GM and Ford responded with cuts to second-quarter production plans, while Chrysler rolled out a new program of sales incentives.

"February was a very disappointing month for industry sales," GM Vice Chairman Bob Lutz told Reuters at the Geneva auto show. "We still expect the economy to recover in the second half. Our crystal ball is not that much better than anybody else's."

Japan's Honda Motor Co Ltd (7267.T: Quote, Profile, Research, Stock Buzz) was the only major automaker to buck the downturn with an increase of nearly 1 percent. Toyota Motor Corp (7203.T: Quote, Profile, Research, Stock Buzz) and Nissan Motor Co Ltd (7201.T: Quote, Profile, Research, Stock Buzz) reported declines of 6.6 percent and 3 percent, respectively.

Auto sales represent one of the first snapshots of overall U.S. consumer demand, and the weakness in February results could provide more evidence for those who believe the U.S. economy has already slipped into recession.

GM's results were at the bearish end of analysts' expectations due to weaker demand for trucks such as the Chevrolet Silverado and Chevy Tahoe. GM said it would cut second-quarter production by 5 percent from year-ago levels.

Ford said it would cut second-quarter production by 10 percent due to weaker demand for its market-leading F-Series full-size pickups and SUVs like the Explorer and Expedition.

Ford also said it would eliminate shifts at four U.S. plants and lay off some 2,500 workers -- or almost 5 percent of its remaining work force -- as part of an effort to cut costs and return to profitability next year.