U.S. auto sales weaken in November
DETROIT (Reuters) - U.S. auto sales slid in November, led by an 11 percent drop at General Motors Corp GM.N, as a weak housing market and higher gasoline prices kept buyers from showrooms and heightened concern that the industry is headed for a deepening downturn.
Ford Motor Co (F.N) surprised analysts by posting a narrow sales increase of 0.4 percent on Monday, marking its first month of higher sales after a full year of unbroken declines for the struggling No. 2 U.S. automaker.
Toyota Motor Corp (7203.T) also eked out a slight overall sales gain of 0.3 percent but saw sales for its luxury Lexus brand drop by 7 percent in the month.
"Rising fuel prices and sliding home values delivered a one-two punch this month," Toyota's U.S. sales chief Jim Lentz said in a statement.
Toyota's Japanese rivals posted more limited sales gains than analysts had forecast. Nissan Motor Co Ltd (7201.T) sales rose 6.1 percent. Honda Motor Co Ltd (7267.T) sales rose 4.7 percent.
Both Ford and GM, which have recently clinched cost-cutting labor deals with the United Auto Workers union, cut first-quarter production plans from year-earlier levels in announcing November sales.
Industry-wide U.S. sales for the past month appeared headed for an annualized result near 15.7 million vehicles based on preliminary data, Ford said. That would be a decline from a sales rate of just over 16 million vehicles a year earlier.
Wall Street analysts have recently cautioned that a turnaround for the U.S. auto sector would be at risk if the economic slowdown that began in the second half of this year deepened into an outright recession in 2008.
Ford, which is battling to stabilize market share, cut production by 7 percent and said it would keep a tight lid on output in light of the weakening economy.
GM cut its planned production by 11 percent.
"Vehicle sales have softened over the last few months. We believe this reflects concerns about the credit and stock market squeeze, along with the ongoing adjustments consumers are making in response to housing and gasoline prices," Ford economist Emily Kolinski Morris told reporters and analysts.
"Clearly we're concerned about the credit market turmoil and the softer economy, so we're taking a cautious approach to planning our business," she said.
GM's sales chief Mark LaNeve echoed that sentiment. "We don't want to bury our dealers in inventory," he told analysts. "We want to try to continue to run leaner on inventory."
'TOUGH' MARKET
Nissan sale chief Mark McNabb said industry-wide sales had been worse than expected in November amid signs that a weaker housing market in states such as California and Florida had been a continued drag on sales.
"It was a tough market," McNabb told Reuters. "It was tougher than I anticipated."
Despite the weaker market, the major U.S. automakers largely stuck to a recent tactic of avoiding deep discounting by better managing inventory and production levels.
"Even with the year-end sell-down upon us, the domestic automakers have stayed committed to the value pricing strategy that limits their investment in incentives," said Jesse Toprak, an analyst with Edmunds.com.
Edmunds, which tracks incentives including rebates and concessional financing, said the average incentive offered on a new vehicle in November rose less than 1 percent from a year earlier to $2,309.
Chrysler LLC and Ford both cut incentive spending from year-earlier levels, Edmunds said.
GM spent slightly more, putting average incentives for all three Detroit-based automakers to a narrow range between about $3,100 and $3,300 per vehicle, it said.
(Additional reporting by Poornima Gupta and Jui Chakravorty, editing by Gerald E. McCormick)
