General Motors, Ford Motor Co. and the Chrysler group boosted sales by jacking up fleet volume last month -- and crossed up analysts in the process.
Analysts project sales by tracking results at dealerships, but they have less of a pipeline into fleet sales. They had predicted a 2 percent industry decline for the month, with domestic automakers down by as much as 6.5 percent.
Instead, U.S. auto sales rose 7.5 percent in January from a year earlier, to 1.14 million units. GM's U.S. sales increased 6.0 percent, while Ford's U.S. sales rose 1.9 percent. The Chrysler group was up 5.0 percent.
Analyst Jesse Toprak of Edmunds.com says fleet sales accounted for the increase: "It's very easy to be up or down 5 percent with the help of a few thousand fleet sales."
Automakers described the heavy fleet volume as a one-time anomaly. But analysts fretted about the three companies' reliance on fleet business.
Merrill Lynch analyst John Murphy described the approach as "feast now, famine later."
"Strong sales may have been sweet this month, but margins will likely suffer later," Murphy wrote in a note to investors. GM's plan to cut fleet sales 10 percent in 2006 will make weak retail sales "more obvious throughout the remainder of the year," he said.
Fleet sales represented 38 percent of GM's sales volume in January, compared with 30 percent in January 2005, said Paul Ballew, GM executive director of global market and industry analysis. Ballew described the fleet volume as a "one-month aberration."
At Ford, fleet sales accounted for 39 percent of January volume, compared with 33 percent in January 2005, said Ford spokesman George Pipas.
Chrysler provides fleet data on a quarterly basis. It would not disclose its January fleet performance. Chrysler's fleet sales ran at a rate comparable to GM's and Ford's, according to an industry source.
Gary Dilts, Chrysler's senior vice president of sales, said Chrysler added fleet sales in January to offset soft retail demand. Fleet sales buoyed sales of the Chrysler PT Cruiser, Dilts said. PT Cruiser January volume rose 44.6 percent year-over-year to 11,406 units.
GM will not specify which vehicles rode on strong fleet sales in January. But sales of some older GM vehicles spiked in January, suggesting heavy fleet sales. For instance, the Pontiac Grand Prix was up 94.4 percent, with 11,903 units sold.
Pipas said at Ford most increases involved the Ford brand. The Ford Crown Victoria and Ford Taurus notched the largest fleet increases. He said "a couple of thousand" Ford Fusions, Mercury Milans and Lincoln Zephyrs also were sold to fleets.
Dale Jewett, Jamie LaReau and Amy Wilson contributed to this report
You may e-mail Mary Connelly at [email protected]