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SUV sales tumble sharply
Posted by craig on: 2005-10-04 07:59:09
October 4, 2005
Several of the automobile dealerships in the Coachella Valley so far seem to be insulated from the sales woes afflicting two of the country's Big Three automakers.
Nationally in September, sales of sport utility vehicles tumbled, pulling down U.S. automakers that already had expected a slump after the summer of employee-discount prices. It was less painful for the Asian brands, which didn't offer those employee discounts.
Several of the automakers reported strong car sales on Monday, but industry-wide, SUVs took a hit in the U.S. market, where gas prices have surged since Hurricane Katrina destroyed parts of the Gulf Coast.
General Motors Corp. reported a 24 percent drop in sales overall. Its truck and SUV sales plunged 30percent while its car sales fell 14 percent. For the first nine months of the year, GM's overall sales were flat.
At Mac Magruder Chevrolet in Palm Springs, however, SUV sales have not been affected so far, said general manager David Nordstrom.
Customers that want to buy them are still doing so, he said.
Nationwide, sales of the Chevrolet Tahoe and GMC Envoy dropped more than 50 percent compared to last September. In addition, sales of the Cadillac Escalade, Mazda Tribute, Ford Explorer, Ford Expedition, Toyota Sequoia and Nissan Armada fell by 18 percent or more. Dodge Durango sales dipped by 11 percent.
GM officials said they knew September would be a challenge after the heavily promoted discounts of the summer months. The automaker invited customers to pay the employee price in June. It ended the promotion Friday.
"We're coming off the three strongest months in the history of the industry," Paul Ballew, GM's executive director of market and industry analysis, told The Associated Press.
Nordstrom said the dealership's inventory was light in September because of the success of the discounting.
"The inventories were decimated. You can't sell from empty shelves," he said.
Ford Motor Co. took a hit, too, in September. Its sales were down nearly 20 percent.
Sales of Ford, Lincoln and Mercury car increased by 6 percent, but SUV and truck sales dropped by nearly 28 percent. Like GM, Ford's overall sales were flat for the first nine months of the year.
In Cathedral City, Palm Springs Motors performed better than Ford Motor Co. The dealership sold as many cars in September - nearly 400 - as it did last September, said general sales manager Scott Simmers.
It simply ran short of inventory last month, he said, adding it "made up ground" with sales of used vehicles.
"We had such an unbelievable July and August. We sold a little under 1,100 vehicles during those months," Simmers said.
Ford attributed its declines to the strong summer of discounting. The automaker permitted consumers to pay the employee price in July, which helped deplete its 2005 inventory.
Ford expects SUV sales to stay soft in the near term, according to George Pipas, the company's U.S. sales analysis manager.
Simmers said the top seller last month at Palm Springs Motors was the Ford Focus. "We definitely have seen an increase (this year) in car sales than in previous years."
"We had a good Explorer month." he added. "Of course, F-series trucks are always strong.
Palm Desert resident Hy Faulkner bought a new F-150 truck from the dealership on Friday. Faulkner took one of his other trucks to there on Monday for service.
"I'm a truckaholic," he said, noting he's bought F-150s for his contracting business, Donco Electric Inc. "I'm stuck with the choices I have as far as engine-wise."
Faulkner said his wife currently drives a six-cylinder Explorer.
"She did have an Excursion," he said. "It was a lease. We decided to trade it in for something with better gas mileage."
GM's Ballew cautioned that gas prices aren't the sole reason for falling SUV sales nationwide. An aging lineup of SUVs and more options in car-based crossovers also are affecting the segment, he said.
Strong pickup sales were further proof that gas prices aren't the only factor in the decline of the SUV. The Dodge Ram pickup had its best month ever. Its sales were up 5 percent, according to DaimlerChrysler AG's Chrysler Group. Toyota officials said sales of its Tacoma pickup increased by more than 21 percent.
Among U.S. automakers, Chrysler bucked the trend. It reported a 4 percent rise in September sales - led by a 26 percent jump in car sales. The Dodge Neon, which Chrysler stopped making two weeks ago, saw a 69 percent increase. Chrysler's truck and SUV sales dipped 1.8 percent, but its overall sales were up 7.5 percent for the year.
Kelly Gaab, general manager of Yucca Valley Chrysler Center, said its sales in September were the same as last September.
"We had a strong July and a strong August," he said. "We cleaned our inventory out."
Dodge trucks were the top sellers, Gaab said, noting economy cars also are popular with customers.
Asian automakers also saw weak SUV sales, but none of the payback that U.S. automakers contended with. Toyota Motor Corp.'s sales were up 10 percent in September, thanks to a 22 percent increase in car sales. Toyota's truck sales fell 4 percent. The Japanese automaker's sales were up 11 percent in the first nine months of the year, and the company said it set a third-quarter U.S. sales record.
"Toyota's record sales reflect increased interest in fuel-efficient vehicles and hybrids," Toyota's North American President Jim Press told The AP. Sales of the hybrid Toyota Prius surged 90 percent.
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