GM, Ford expect February sales to fall

DETROIT (Reuters) -- General Motors and Ford Motor Co. today said U.S. sales declined in February as they pulled back on discounted sales to daily rental companies.

GM's February U.S. sales would likely be down 6 percent to 7 percent, GM spokesman John McDonald said, adding that the company expects retail sales to be flat for the month.

Ford's U.S. sales in February would likely slide about 10 percent to 15 percent, with fleet sales accounting for the majority of the decline, said George Pipas, Ford's chief sales analyst.

Sales of Ford vehicles to commercial and government fleets are expected to be down 20 percent in February, which includes a 30 percent decline in sales to daily rental companies, Pipas said. He added that sales of the company's best-selling F-series pickups may fall by a double-digit percentage in February.

Both GM and Ford, which are working to restructure their North American operations, have announced plans to reduce fleet sales this year. The cuts are part of an effort to move away from low-margin sales as the U.S. automakers try to recover from billions of dollars in losses and shrinking U.S. market share.

Analysts say fleet sales allowed the automakers to keep their assembly plants running, but eroded the value of the brands.

Automakers will release final sales results for the month on Thursday, March 1.

Analysts expect industry-wide sales on an annualized and seasonally adjusted basis to slip to between 16 million and 16.2 million, sharply below the 16.6 million recorded a year ago, according to analysts.

GM expects the U.S. February industry light vehicle sales to come in at an annualized rate of 16 million units, while Ford expects retail sales for the industry also to be down.

"One potential headwind for the month could be an uptick in industry inventories among several Asian (automakers)," Bear Stearns analyst Peter Nesvold said in a research note. "This could indicate that industry sales are slowing."

"Alternatively, the negative impact could be limited to domestic automakers if the Asian (automakers) react by increasing incentives significantly," he said.