Report Shows U.S. Auto Cos. Lagging Japan
December is proving to be another disappointing month for the big three U.S. automakers. Today's sales report for last month showed a double-digit decline in trucks sold by General Motors, and Ford dropped almost 13% on the whole. Chrysler eked out half a percent gain. On today's "Closing Bell," CNBC’s Dylan Ratigan sifted through the data to find out what it all means going forward.
General Motors sales fell 13% in December as mostly flat results on the car side were offset by a plunge of 19% in truck sales. For all of 2006, GM sales were down almost 9%.
George Magliano, director of automotive research at Global Insight, said, "We don’t see enough products coming out to reverse that trend. We see them coming down the road in 2008, 2009, as they work their way through the product lifecycle.”
John Casesa, president at Casesa Strategic Advisers, added that GM had a nice run in share price despite sales numbers. He explained the stock did well last year because it embarked on a bunch of restructuring initiatives. “It had a share holder that agitated for change [Kirk Kerkorian], and it needed change," he said.
Kerkorian has since sold his stake in GM.
Ford sales were down nearly 13%, to 231,900 vehicles. Despite that decline, the automaker was able to keep its status as the nation's number-two car seller. For all of 2006, Ford sales were down about 8%.
“Investors had been very pessimistic on Ford," Casesa said, "and this new CEO, who’s a very talented guy, has yet to come out and say, 'This is my plan.' So I think there’s a lot of opportunity for upside with the right plan.”
Chrysler, the American arm of DaimlerChrysler and the third of the U.S. big three, reported sales rose 0.5% last month. But for all of last year, sales were down 7%.
At Toyota, sales were up 12.3%. The total number of vehicles sold came to just 228,322.
According to Casesa, Toyota is in a virtuous cycle right now. “And it’s able to replace a larger percentage of its product line every year than most of its competitors do," he said. "I think Toyota is doing it very well, and the real challenge for Toyota is to continue to execute well.”
George Magliano added Honda has done well, and Nissan is in the midst of a product revitalization. They are going to put a lot of pressure on Detroit, he says.