- The Washington Times - Tuesday, May 3, 2005

DETROIT (AP) — Asia’s top automakers yesterday reported double-digit U.S. sales gains in April, further chipping away at the market share of leaders General Motors Corp. and Ford Motor Co.

GM and Ford both reported lower sales last month as demand for sport utility vehicles and other light trucks, which generate some of the highest profit margins, slipped against a backdrop of higher gas prices.

DaimlerChrysler AG’s Chrysler Group, the smallest of Detroit’s Big Three, stood its ground, however, with brisk sales of minivans and pickups.

Overall, U.S. vehicles sales were up. The seasonally adjusted annual sales rate for April was 17.46 million units, up from 16.62 million units the previous year, according to research firm Autodata Corp. The rate indicates what sales would be for the full year if they remained at the same pace for all 12 months. Full-year sales for 2004 were about 17 million.

“April saw the industry withstand continued high fuel prices, rising interest rates and a declining stock market while still showing resiliency on the strength of new products,” said Gary Dilts, Chrysler’s senior vice president for sales.

Still, the effect of rising fuel prices is being experienced at many car dealerships in the Washington area.

Car salesmen at Fitzgerald Auto Mall in Annapolis report that more customers are trading in their SUVs for smaller cars.

“We had three Navigators traded in last month for smaller cars,” said Kenny Cresswell, a sales manager at the dealership.

Greg Tayoor, the Internet sales manager for Crystal Ford Limited in Silver Spring, said rising gas prices have so far not cut into SUV sales, but he has seen an increase in sales for more fuel-efficient cars.

“Most people come in knowing what they want, but I have seen an increase in Ford 500s which are bigger than the Ford Taurus, but more fuel efficient,” he said.

Big three automakers Ford and GM each reported lower sales figures.

GM, the world’s biggest automaker, said its total vehicle sales fell 7.7 percent. A 17.2 percent reduction in truck sales was offset by a 7.9 percent increase in car sales.

No. 2 Ford said its sales fell 5.1 percent in April — its 11th consecutive month of year-over-year sales decreases.

Sales of Ford, Lincoln and Mercury brand cars were off 2.4 percent from April 2004, while truck sales fell 6.4 percent. Ford said the decline in truck volume specifically was lower sales of traditional sport utility vehicles.

Sales percentages are adjusted for differences in the number of selling days. There were 27 selling days in April 2005 and 26 in April 2004.

Analyst David Healy of Burnham Securities said Ford and GM continued to trail competitors because most of their new products have failed to resonate with consumers.

“The older models are slipping faster than the new ones are helping them, so they’re losing market share,” he said.

He said Ford and GM are struggling to produce exciting new designs in part because high health care costs — a problem the Asian companies do not face — mean they have less to spend on product development.

“There’s something like $1,500 worth of Blue Cross in the average Detroit automobile these days,” he said.

• Staff writer Melissa Brosk contributed to this report.

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