By Jeff Green

Jan. 6 (Bloomberg) -- General Motors Co. lost U.S. market share to Ford Motor Co. and Toyota Motor Corp. in December as the government-controlled automaker failed to take advantage of improving consumer demand.
GM light-vehicle sales fell 5.7 percent, worse than analysts’ estimates, after it trimmed deliveries to fleet customers and worked to wind down half of its 8 domestic brands. Ford sales soared 33 percent last month, and Toyota jumped 32 percent, the automakers said yesterday.
“People are still concerned about GM’s future and purchasing a GM car may seem like more risk than a consumer wants to take,” said Rebecca Lindland, an analyst at IHS Global Insight in Lexington, Massachusetts. “This is a company that is still recovering from bankruptcy.”
A 15 percent increase in industrywide sales in December capped automakers’ first quarterly improvement since the last three months of 2006. The recession and Chapter 11 filings at the predecessors of Detroit-based GM and Chrysler dragged 2009 new-vehicle purchases to the lowest in almost three decades.
U.S. sales of cars and light trucks improved to 1.03 million, according to industry researcher Autodata Corp. That equated with a seasonally adjusted annual rate of 11.3 million vehicles, Autodata said. The year-earlier rate was 10.3 million.
Unloading Brands
GM said its December decline was driven chiefly by a 33 percent drop in deliveries to business customers such as rental- car companies and a 55 percent plunge for the Hummer, Pontiac, Saturn and Saab brands that are being shut or sold. GM said sales rose 2.2 percent for the Chevrolet, Cadillac, GMC and Buick models that the biggest U.S. automaker is keeping.
Last month’s tally reflected an unfavorable comparison with results from a year earlier, when fleet sales were increased before a cut in early 2009 output, said Susan Docherty, GM’s North American sales and marketing chief.
“I’m very encouraged with what we’re getting done on our core brands -- Chevy, Buick, GMC and Cadillac -- and we’ve had a very orderly wind down on Pontiac and Saturn,” Docherty said in a Bloomberg Television interview.
GM emerged in July from a 40-day, $50 billion, government- backed bankruptcy that gave taxpayers an ownership stake of about 61 percent. The automaker began repaying some of the $6.7 billion in outstanding government loans last month.
‘Negative Stories’
“Ford is much further along in their recovery than GM, and it shows,” Lindland said. “From inside the industry, we are more confident things are getting better at GM. For consumers, that still isn’t the case because there are still a lot of negative stories left on GM.”
For the year, GM’s U.S. market share fell to 19.9 percent from 22.3 percent as Ford rose to 16.1 percent from 15 percent and Toyota climbed to 17 percent from 16.7 percent, according to Woodcliff Lake, New Jersey-based Autodata.
Michael DiGiovanni, GM’s chief sales analyst, said the automaker’s December performance was “very encouraging” in light of its bankruptcy restructuring.
“We were able to maintain 20 percent of the light-vehicle market, which is 3 share points ahead of Toyota and 4 share points ahead of Ford and keeps us solidly in the No. 1 position in the U.S.,” DiGiovanni told reporters on a conference call.
Ford, the only major U.S.-based automaker to forgo a federal bailout, cited an 83 percent gain for the Fusion and a doubling of Taurus sales.
The shares of the Dearborn, Michigan-based automaker rose 68 cents, or 6.6 percent, to $10.96 yesterday in New York Stock Exchange composite trading. That was the highest closing price since July 2005.
Industry Total
Industry sales for last year fell 21 percent to 10.4 million units, the fewest since 1982, Autodata said. U.S. sales were 13.2 million in 2008, according to Autodata, after averaging 16.8 million this decade through 2007.
Honda Motor Co. said December U.S. deliveries increased 24 percent, and Nissan Motor Co. rose 18 percent, while Chrysler Group LLC declined 3.7 percent.
Last month’s results reshuffled the industry rankings in the U.S., with Honda climbing past Auburn Hills, Michigan-based Chrysler into fourth place in full-year sales. Ford, Toyota, Honda, Nissan and Chrysler all beat analysts’ estimates.
The sales projections for the U.S.-based automakers represented the average of six analysts surveyed by Bloomberg, and the estimates for Japan’s Toyota, Honda and Nissan were issued by Edmunds.com.
Analysts’ estimates are based on daily selling rates. December had 28 sales days, 2 more than in 2008. Sales totals would be about 8 percentage points higher without the adjustment. For example, GM’s adjusted sales decline was 12.4 percent, bigger than the 10.6 percent drop projected by the analysts.
2010 Outlook
Industry sales in 2010 may rise 19 percent to 12.4 million because of the need for new vehicles and improving availability of consumer credit, said Sean McAlinden, chief economist for the Center for Automotive Research in Ann Arbor, Michigan.
“For 2010, I’m leaving my seat belt on because I think volatility is still an element of the new norm,” Ken Czubay, Ford vice president of U.S. marketing sales and service, said on a conference call.
Al Castignetti, Nissan’s vice president of U.S. sales, wouldn’t give a forecast for industry sales growth this year beyond saying that his “personal view is we’re not going to see 10 percent or 15 percent increase.”
“I’m fairly optimistic,” Castignetti said. “The market will get better, credit will get better.”
--With assistance from Mike Ramsey, Keith Naughton, Bill Koenig and Katie Merx in Southfield, Michigan; Alan Ohnsman in Los Angeles; and Vivek Shankar in San Francisco. Editors: Ed Dufner, Jamie Butters
To contact the reporter on this story: Jeff Green in Southfield, Michigan, at +1-248-827-2945 or jgreen16@bloomberg.net;
To contact the editor responsible for this story: Jamie Butters at +1-248-827-2944 or jbutters@bloomberg.net
-0- Jan/06/2010 05:01 GMT