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New no. 1. Ford sales top GM, Toyota

By Chris Isidore, senior writer


NEW YORK (CNNMoney.com) -- Recall-plagued Toyota Motor reported a 9% drop in U.S. sales in February, but it appears other automakers didn't gain as much from Toyota's problems as expected.

Even Ford Motor, which posted strong sales to vault ahead of Toyota and GM to claim the market lead in the U.S., said it didn't believe its gains were a result of Toyota's problems.

Ken Czubay, Ford vice president, said the company believes many traditional Toyota customers sat on the sidelines instead of buying a car from another automaker.

Industrywide sales rose 13% from a year-ago, but it was fleet buyers, such as rental car companies, rather than consumers, that accounted for the improved sales. Between the Toyota recalls, snow storms and continued worries about the economy, there were plenty of reasons consumers stayed out of dealer showrooms during the month.

Sales were down for almost all of Toyota's models. One notable exception was a 10% rise in sales of the Prius hybrid, which was recalled due to a problem with its brakes .Bob Carter, general manager of the Toyota division in North America, said there was some decline in first-time Toyota buyers, but that there did not seem to be a noticeable loss of existing customers to other brands.

Carter said some customers likely delayed purchases to see what offers Toyota would be making to win back consumers. He estimated sales were down about 18,000 in the month due to the recall problems.

Toyota did roll out a number of incentives to buyers, offering 0% financing over five years on about 80% of its models, along with low lease rates. It is also offering two-years of free scheduled maintenance, like oil changes, to any buyer who already owns a Toyota.

GM responded with its own 0% offer on more than half of its 2010 models, while Ford officials said they plan on new incentives as well.

All the other major automakers posted gains compared to a year ago, but that was to be expected given that February 2009 was the worst month for sales in nearly three decades.

While Ford (F, Fortune 500) reported a 43% increase in U.S. sales in February, much of the gain was due to a 74% jump in fleet sales to businesses. Rental car companies alone accounted for just over 30,000 vehicle sales. Without the rental companies, Ford sales would have been up only 13% in the month.

But including sales at the Volvo unit Ford is in the process of selling, its sales total topped GM's for the first time since August 1998, when a strike briefly shut many GM plants.

"The February results demonstrate that not only are the recent Ford product offerings being well-received, but also that GM is still suffering from post-bankruptcy syndrome," said Jack R. Nerad, executive market analyst for Kelley Blue Book.

In a further display of confidence, Ford also announced an increase in its North American vehicle production target for the second quarter.

GM doesn't gain as much from Toyota problems

GM reported its sales rose only 12% from a year ago, falling short of Edmunds.com's forecast of a 16% rise. GM's sales were also down slightly from January.

GM reported that sales at the four brands it is retaining - Chevrolet, GMC, Buick and Cadillac, were up 32% from February 2009. But there was an 86% drop in sales at the four brands it is in the process of closing or selling -- Saab, Saturn, Pontiac and Hummer.

GM blamed some of the weakness on the snow that hit much of the eastern United States during the month. The company said bad weather may have cut overall sales by 5% or more. GM pointed out that Chevrolet sales were down 17% in the Northeast, but up by double digits in every other region.

"It took a bit of time for dealers to get the snow off the cars and get the customers back in the showrooms," said Susan Docherty, GM's vice president of U.S. marketing, on a conference call.

GM didn't give any estimates about the impact Toyota's problems might have had on GM's sales. "All I'll say is we got what we thought was our fair share of Toyota sales," said Michael DiGiovanni, GM's head of sales analysis, on the call.

Chrysler Group's sales rose less than 1% from a year ago. But that was a positive surprise, as Chrysler had been expected to join Toyota in reporting lower sales. A big jump in fleet sales kept Chrysler sales from falling.

Chrysler's sales were also good enough to barely stay ahead of Japanese automaker Honda Motor (HMC) for the No. 4 position in U.S. sales.

Honda's sales rose 13%, but that was weaker than Edmunds.com's forecast of a 24% gain. Japan's Nissan reported a 29% jump in sales compared to a year ago.

Some analysts think Ford and Korea's Hyundai stood to gain the most from Toyota's problems. Sales for Hyundai were up 11% while sales for sister brand Kia rose 9% in February from a year ago.


Money magazine is looking for Detroit families (including people who have recently moved away) who are willing to discuss their finances and are looking for financial advice. If interested, email your contact information to gmannes@moneymail.com.  To top of page

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