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I said yesterday that it was a possibility, and now it's official: For only the second time this century, Ford (NYSE: F ) sold more cars and trucks in the U.S. in March than General Motors (NYSE: GM ) .
That's a noteworthy milestone for Ford's ongoing resurgence -- or is it a setback for a General Motors team that's still struggling to get traction?
Truth is, it's probably a little bit of both.
Good and bad news for the General
Looked at out of context for a moment, GM actually had a decent month in March. Fleet sales were down a little, incentives were down a lot, and overall sales were still up 11% over an impressive effort in March of 2010. Retail sales of passenger cars were up a hearty 34%, fueled by strong demand for the compact Chevy Cruze and new Buick Regal.
The Cruze has turned out to be a nice story for GM. Based on a platform developed by GM's Korean unit, the Cruze has demonstrated that GM can build a well-equipped small car that deserves its somewhat premium pricing. For those who remember GM's dubious past compact-car efforts like the Chevy Cavalier, the Cruze might as well be from a different planet. At a moment when Americans are looking for fuel-efficient cars, GM -- for once -- has a solid entry to show.
But the Cruze, by being exceptional, also nicely illustrates GM's problem. The Cruze is a new product that shows well against the competition. GM doesn't have a lot of those, and it'll be awhile before that really changes. That in turn is going to make it hard for the General to develop sales momentum, at least without going back to the incentives well.
And Ford, meanwhile, is going to be eating GM's lunch.
Ford just keeps rolling
I doubt that Ford CEO Alan Mulally and his hyperfocused team will spend much time celebrating their one-month sales advantage over their ancient cross-town rival. Ford still has plenty to do, but so far, recent efforts are paying off handsomely:
- Fiesta sales are finally taking off. The littlest of Fords saw its sales increase 56% over February, thanks to rising oil prices and the Japanese crisis. A nice little car that is doing particularly well in southern California, the Fiesta is likely to continue to benefit from the production disruptions affecting supplies of the Honda (NYSE: HMC ) Fit, its key rival.
- Other passenger cars also did well: The popular midsize Fusion saw its sales increase 21%. The Fusion is another model that could see big benefits if supplies of its key rivals (in this case, the Toyota (NYSE: TM ) Camry and Honda Accord) are disrupted for any length of time. The Mustang also saw a solid increase in sales, up 47%.
- The Explorer. The completely redesigned kid-hauler has been a hot seller since it arrived in January, and is turning out to be a big story for the Blue Oval Crew. Ford claims it has been its "fastest-turning vehicle" for the last three months, meaning that Explorers spend less time sitting on dealer lots than any other Ford. Ford also says that the Explorer's "conquest rate," a measure of how well a vehicle lures owners of other makes, is an impressive 43%.
The Japanese crisis and rising oil prices could play right into Ford's hands. With the Fiesta, the Fusion, and the just-introduced Focus, Ford now has three fuel-efficient cars that can compete with anybody. If supplies of the Japanese class leaders turn out to be constrained for any length of time, Ford is particularly well-positioned to see major gains.
Short takes: The other guys
How about the rest of the field? Not all automakers had reported as of early Friday afternoon, but early results showed a strong month across the board:
- Nissan say sales jump 27%. The company says that March was its best month in company history, at least in the U.S.
- Chrysler continued its improbable resurgence. Sales were up 31% for the automaker's best month since May of 2008, as redesigned products continue to make their way to showrooms.
- Toyota's figures weren't yet available at press time, but the company was expected to post strong results -- helped in no small part by panic-buying of popular models like the Prius that were expected to be in short supply in coming months.
From GM's perspective, it's bad enough that they got beat by Ford in March. The larger concern is that most of their rivals saw bigger percentage gains than theirs -- and the magic bullets in GM's product pipeline are still a long way off. Can the company make hay while its Japanese rivals struggle to recoup? The next few months will be telling.