[NYTr] Auto sales slump continues in US

[All the News That Doesn't Fit]

sent by Steven Robinson (activ-l)

[The deathwatch in Detroit continues. -SR]


Toronto Globe & Mail - Sep 4, 2007
http://www.reportonbusiness.com/servlet/story/RTGAM.20070904.wautoss0904/BNS

Auto sales slump continues in U.S.

by Greg Keenan
Globe and Mail

Vehicle sales slumped again in the crucial U.S. market last month and
although the decline was less than the dismal 12-per-cent slide in July,
General Motors Corp. will cut production, while Ford Motor Co. will
boost output and has introduced new rebates to spur sputtering sales.

"We have an industry that's clearly in the midst of some kind of mild
contraction, I don't know how else to describe it," Paul Ballew, GM's
executive director of global markets, said on a conference call Tuesday.

But the market is much more buoyant in Canada, where auto makers
reported the best August on record with a 3-per-cent rise in sales to
158,624 from 153,905 a year earlier.

GM was cheered by an unexpected jump of 5 per cent in U.S. sales last
month from year-earlier levels, but the largest Detroit auto maker said
its North American factories will turn out 10 per cent fewer vehicles
in the fourth quarter than they did in the same period in 2006, with
about half the cut caused by the housing crisis and rising gasoline
prices.

Enlarge Image U.S. sales fell by more than 3 per cent - the third
straight monthly decline. Ford, Chrysler LLC and Toyota Motor Corp. all
reported that sales fell from year-earlier levels. The 16-per-cent drop
in Ford's sales prompted the company to slap new incentives of $1,000
(U.S.) on its 2007 and 2008 models, although it's also increasing
production from the levels reached in the fourth quarter of 2006.

Honda Motor Co. Ltd. joined GM in bucking the downward sales trend.
Toyota outsold Ford in the U.S. market for the second straight month.

"Right now the biggest impact on the vehicle industry is coming about
due to the fact that we've had gas prices run up to roughly $3 a
gallon, we have a pretty severe housing correction occurring in parts
of the country, and then we have a segment of the U.S. population which
is being impacted by those factors and they are delaying their vehicle
purchases and exiting the new vehicle market," Mr. Ballew said.

That queasiness among U.S. consumers spills across the border and
affects the Ontario auto belt, as workers in Oshawa, Ont., found out
last week when GM announced it will eliminate the third shift of
production at its pickup truck plant in that city.

GM said Tuesday that sales of its big pickups rebounded dramatically in
August from a plunge in July in the U.S. market, but noted that it
boosted incentives on the Chevrolet Silverado and GMC Sierra by more
than $400 to $3,900 a vehicle.

The increase in pickup sales is good news in an otherwise gloomy
outlook, Canadian Auto Workers economist Jim Stanford said.

"Who knows, maybe we'll be able to convince GM to put the third shift
back on sooner rather than later, if their pickup sales continue to
regain momentum," Mr. Stanford said. Gains by the Canadian units of the
Detroit Three helped boost sales in Canada, which now are on track to
top 1.65 million units.

Ford Motor Co. of Canada Ltd. put in one of its strongest performances
of the year with a 9-per-cent jump that moved it closer to Chrysler
Canada Inc. in the battle for second place behind General Motors of
Canada Ltd.

GM sales rose 3 per cent, while Chrysler posted a 1-per-cent rise.

August was the best month yet for Honda Canada Inc., which posted a
jump of 3 per cent to 18,270. That boost allowed it to surpass Toyota
Canada Inc., whose sales slid 5 per cent to 17,947.

"We can owe most of this hot market to the West, whose sales are up
double digit across the Prairies and into B.C.," said industry analyst
Dennis DesRosiers, president of DesRosiers Automotive Consultants.

"As well, the strength of the dollar relative to the U.S. dollar has
given [auto makers] a lot of room to provide better pricing into the
market," Mr. DesRosiers said. Most of the benefit to consumers has come
in the form of increased incentives, he said and not through lower
manufacturers' suggested retail prices.