Ford outsells GM for second time since 1998

Ford Motor Co. outsold rival General Motors in the United States last month for the second time since 1998.

Ford, aided by a 21 percent jump in truck sales amid rising gasoline prices, said today it sold 212,295 light vehicles last month, or 5,674 more than GM. Ford's overall gain of 16 percent was its biggest this year.

Ford last outsold GM in February 2010, but by a slimmer margin of just 471 vehicles, according to the Automotive News Data Center. In July 1998, GM, hobbled by a strike at Delphi Corp., was outsold by Ford by 83,883 units.

GM, which outperformed the overall U.S. market in January and February with aggressive incentives, is still ahead of Ford in year-to-date sales by more than 97,000 units. It has been the U.S. sales leader on an annual basis since 1931.

Ford's March results were driven by higher fleet sales, strong F-Series demand and record monthly sales of the Fusion and Escape. Fiesta sales reached 9,787, up 56 percent over February, the automaker.

The Ford division posted a 28 percent jump in sales, offsetting a 2 percent decline in volume at Lincoln. Ford's F-Series truck lineup - featuring more fuel efficient powertrains for 2011 - posted sales of 53,272, up 25 percent compared to a year ago.

"The No. 1 unmet need for full-size pickup truck owners has been fuel economy," Doug Scott, marketing manager for Ford's truck line, said in a statement.

Ford said its retail sales - a key measure of consumer demand - rose 14 percent. Fleet sales were up 29 percent, with commercial sales up 50 percent, government demand up 33 percent and daily rental volume up 13 percent.

New models such as the Chevrolet Cruze and healthy demand for fuel efficient cars and crossovers helped GM post a 10 percent gain in March sales.

The automaker said car sales rose 15 percent, while crossover demand jumped 30 percent and big pickup sales jumped 11 percent.

It was the 7th consecutive monthly sales gain for GM, but trailed the increases posted in January and February as the automaker reduced discounts.

GM's average incentive dropped 17 percent to $3,109 per vehicle last month from February levels, online shopping guide TrueCar estimated.

GM said retail sales advanced 17 percent compared with March 2010.

Combined retail sales of models launched since June 2009 – including the Chevrolet Equinox, Cruze and Volt; Buick Regal; GMC Terrain; and Cadillac SRX – advanced 54 percent last month and rose 74 percent during the first quarter, GM said.

Fleet sales represented 24 percent of GM's sales volume during the first quarter, compared with 30 percent in the first quarter of 2010.

"Our plan was to get out of the gates quickly in the first quarter and we succeeded," Don Johnson, head of GM's U.S. sales operations, said in a statement.

Overall, U.S. auto sales in March are expected to rise about 12 percent from last year's levels as the industry continues to rebound.

But rising gasoline prices and manufacturing disruptions caused by the Japanese earthquake, tsunami and nuclear crisis could slow the industry's ongoing sales recovery during the spring selling season, analysts say.

And while credit markets continue to thaw, making it easier for consumers to finance new vehicle purchases, new vehicle demand is still being hampered by high unemployment and a weak housing market.

The Labor Department reported today that employers added 216,000 jobs in March, slightly above forecasts and a fresh sign hiring is gaining momentum.

Consumer confidence fell more than expected to a three-month in March, the Conference Board said earlier this week. The business group said 3.6 percent of Americans plan to buy a new car in the next six months, down from 3.9 percent in February.

Analysts say GM, Toyota Motor Corp. and others dialed back on incentives in march – resulting in smaller sales gains for the month after February demand rose 27 percent and January volume jumped 17 percent.

TrueCar.com estimates the industry's average incentive per vehicle dropped 6 percent from February to $2,432 last month. In March 2010, industry discounts averaged $2,798 per vehicle.

Still, March sales are expected to top 12 million vehicles on a seasonally adjusted basis for the sixth consecutive month. The consensus of 9 analysts surveyed by Bloomberg was 12.9 million.

That would be up from a SAAR of 11.78 million a year earlier and down from February's 13.4 million SAAR.

Industry sales are up 23 percent through February this year.

Last year, light-vehicle sales climbed to 11.6 million units from a 27- year low in 2009. But sales volumes remain about 31 percent below the 16.8 million-unit annual average from 2000 to 2007, according to Autodata Corp.

The rise in oil and gasoline prices is drawing buyers away from light trucks and into smaller cars, analysts said.

In a recent report, J. P. Morgan analyst Himanshu Patel said that each $1 increase in the U.S. retail price of gas results in a 5 percentage-point shift toward lower-margin cars for automakers.

U.S. gas prices rose more than 3 cents to $3.60 a gallon over the last week, and have climbed by 80 cents from a year ago, the Energy Department said this week.

"With gasoline prices eclipsing $3.50 a gallon, consumers are placing a high priority on fuel efficiency in every size and kind of vehicle," said Ken Czubay, Ford's head of U.S. marketing and sales.

Political turmoil in the Middle East has sent the cost of crude oil to above $100 a barrel.

"When there is unrest, consumers tend to take a wait and see approach to purchasing big ticket items," Jesse Toprak, an analyst with TrueCar.com, said last week.

The aftermath of the Japanese earthquake and tsunami last month is also expected to dampen supplies and sales of select models in coming weeks.

"The uncertainty surrounding future production and vehicle availability may limit dealers' willingness to provide additional discounts on top of OEM incentives," analyst Richard M. Kwas of Wells Fargo said in a report this week.

As a result, Kwas expects the April SAAR to fall sequentially from March because of inventory shortages caused by the Japanese earthquake.

"Underlying retail demand continues to strengthen and automakers will attempt to make up for lost production later in the year," he added

GM, Ford, Toyota, Honda, Nissan and other automakers have idled plants and cut output because of parts shortages in Japan. The unplanned reduction in car and light truck output and supply is expected to prompt Japanese automakers to reduce fleet sales and redirect inventory to retail sales.

J. D. Power and Associates expects March fleet volume to drop to 213,000 units, and retail sales to total 991,900 units, up from 849,735 a year ago.

By David Phillips- Automotive News