For the Big Three, 2005 was a down sales year for two out of three -- and the biggest two at that.
General Motors (NYSE: GM ) reported that 2005 unit sales fell 4% -- with cars off 7% and trucks declining 2%. The good news could be summed up by this quote: "We're thrilled that consumers voted with their pocketbook and made Chevrolet the number one U.S. brand in 2005." Chevy is back on top for the first time since 1986 after introducing four new entry-level vehicles. But GM's overall results were anything but thrilling.
Ford (NYSE: F ) used its press release headline to announce its first increase in car sales since 1999. The increase in units sold, though, was a less-than-impressive 2%. The bad news was that total vehicles sales decreased by 4.9% compared to last year. Trucks, two-thirds of the total units sold, deflated a sharp 8%. Some of the bigger model sales declines were in sports utility vehicles like the Ford Explorer and the Lincoln Navigator, which, respectively, reported 29.3% and 29% drops.
The news at DaimlerChrysler (NYSE: DCX ) was far rosier, with a 4% increase in 2005 U.S. sales of passenger vehicles. Mercedes-Benz (8.9% of total units sold) reported December sales were the highest monthly total ever in the U.S. (up 17%), and 2005 was the twelfth consecutive year of sales gains -- although the 2005 gain was a meager 1%.
Chrysler continued to build on a successful 2004, when a record nine new models were introduced. Although the new model introductions slowed in 2005, sales didn't. They increased a strong 5%.
General Motors has already announced its restructuring plan, which includes health care cost reductions. Analysts expect it to report modest earnings of $1.06 a share in 2006. At 18.2 times forward earnings, earnings-challenged GM is hardly what I'd call value priced, given the relative uncertainty surrounding its outlook.
The outlook ahead is cloudy for Ford. Its Jan. 23 announcement of a restructuring plan is expected to include plant closings and layoffs. Ford's president for its operations in the Americas stated today that the 2006 sales outlook will probably not outshine 2005. Analysts agree. They expect Ford to report a decline in 2006 earnings.
DaimlerChrysler expects to introduce a record number of new models next year. That should help the company post the $4.23 a share in earnings analysts expect (up from a projected $3.34 this year). At 12.6 times forward earnings, the company is priced below the 14.5 times Toyota (NYSE: TM ) commands and above the 11.1 times Honda (NYSE: HMC ) garners. And I'd say the premium to Honda is justified, as analysts expect Honda to grow earnings 5% a year for the next five years, while Daimler's growth forecast is 6.1%.
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