Automakers Post Disappointing Nov. Sales

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Auto sales fell in November and though they still outpaced a dismal October, the results were disappointing to U.S. automakers who introduced a flurry of discounts to lure buyers to showrooms. Sport utility vehicle sales slid again.

General Motors Corp.'s (GM) sales were down 11.3 percent, led by a 16.7 percent decrease in sales of trucks and SUVs and a 3 percent decrease in car sales. GM's sales were down 3 percent in the first 11 months of the year.

Paul Ballew, GM's executive director of market and industry analysis, said the results were a positive sign after sales plummeted in October. Ballew said sales will likely continue to pick up in December as the industry gets further away from the huge surge in sales over the summer, when U.S. automakers offered popular discounts.

"We just have to find the right balance again between the strength we saw this summer... and now what we're seeing as a bit of weakness in the industry," Ballew said.

Ford Motor Co. (F) said sales of its Ford, Lincoln and Mercury brands were down 18 percent compared to last November. Car sales slid 6 percent despite strong sales for the company's new Ford Fusion, Mercury Milan and Lincoln Zephyr sedans. Sales of Ford trucks and sport utility vehicles were down 22 percent, led by a sharp 52 percent decline in sales of the mid-size Ford Explorer SUV.

Ford's U.S. sales analysis manager George Pipas said payback from summer discounts is still having some effect on truck and SUV sales, but a trend toward smaller vehicles also is taking hold. Cars are on pace to outperform sales of trucks and SUVs this year for the first time since 1981, he said.

Pipas said that trend was accelerated by high gas prices this fall. He predicted that SUV sales will stabilize if gas prices remain around $2 a gallon.

"These are very, very difficult times for the traditional SUV segment," Ballew said.

Toyota Motor Corp.'s car sales were up 9.3 percent for the month, led by huge increases in sales of its Lexus luxury sedans, but sales of trucks and SUVs were up just 1 percent for an overall sales increase of 5.5 percent. The Japanese automaker's sales were up 11 percent for the January-November period.

Nissan Motor Co. took a bigger hit in truck sales, with sales of its Titan pickup down 30 percent. Nissan sales were down 7.7 percent overall, but were up 11.4 percent overall for the first 11 months of the year.

General Motors Corp. introduced its "Red Tag" discount in mid-November after a 23 percent drop in sales the month before after it ended its popular summer discounts. Ford matched GM a day later and Chrysler Group followed with a program that gives customers debit cards for $2,400, two years of free scheduled maintenance and an increased warranty.

Pipas said response to the discounts was more muted than automakers expected but could pick up in December.

"My experience says it takes a week for dealers and customers to get the message," he said. "There is certainly a lag effect when you announce one of these programs."

Sales percentages were adjusted for differences in the number of selling days. There were 25 selling days in November 2005 and 24 in November 2004.

GM shares rose 64 cents to $22.54 on the New York Stock Exchange. Ford shares fell 4 cents to $8.09 and DaimlerChrysler AG (DCX) shares rose 72 cents to $51.01.