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Tuesday, October 03, 2006

September Car Sales, No Ambulances Needed (F)(GM)(DCX)(TM)(HMC)

The markets were not expecting much beyond more pain. Maybe when Ford offered zero percent financing terms on its trucks investors became anxious about the company's sales propects. .Or when The Wall Street Journal reported that GM's turnaround might just be a mirage.

Sales at Ford for September 2006 compared to September 2005, sales rose 4.7% to 238.848. The firm's troubled truck products were down again, 5.4% to 146,737. But, car sales rose 26% to 92,111. Sales of the Ford flagship, the F-Series truck, are no longer dropping like a stone. Jaquar sales fell by about hald, but Ford has maintained it will not sell the unit. Maybe that will change now. Ford stock also ran up 25% in the quarter ending September 29, so someone on Wall St. was anticipating a turn.

US sales for DaimlerChrysler were off 2.3% to 188,761.Sales at the Chrysler Group fell 3.8% while Mercedes sales rose 13.2%.

Nissan's sales in the US dropped 5.6% to 88,340, dragged down by slow sales of its infiniti luxury brand. If the slide continues, Nissan chief Carlos Ghosn may lose some of his bargaining power with GM as he tries to engineer a three-way alliance with the two car companies and Renault, which he also runs.

GM's overall sales were off 3.1% to 334,025. Cars were off 6.4% to 137,450. Light truck sales were down .7% to 200,930. Sales of these SUVs and pick-ups tend to generate more profit per vehicle, so the trend was good for the world's largest car company. At mid-day, after it had announced September sales, GM's shares traded just shy of their 52-week high trading at $33.33.

The bad news for US car makers is that Toyota went to town, again. Vehicle sales were up 25% to 222,950. Lexus, Toyota's luxury brand, did not do as well, up 16.6%.

Honda's sales in the US dropped 4.1% to 116,226.

September 2006 has one additional sales day compared to the same month last year.

As the US manufacturers look ahead there is some hope for further recovery in sales because crude has finally dropped below $60 a barrel.

Lower gas prices may help their SUV and pick-up sales, but it won't save them from Toyota.

Douglas A. McIntyre can be reached at douglasamcintyre@247wallst.com. He does not own securities in companies that he writes about.
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