DETROIT (Reuters) - U.S. sales of new cars and light trucks fell 3.5 percent in February, from strong levels a year ago, but the results were far better than expected and prompted analysts to say the auto industry may have weathered the worst of a short-lived U.S. recession.
Underscoring a stronger industry sales outlook, and a widely shared belief the United States is back on the road to recovery, Ford Motor Co. (NYSE:F - news) said it was setting its second-quarter North American production estimate at 1.18 million vehicles, an increase of 4 percent, or 50,000 vehicles, over the same quarter last year.
The boost in output matched one announced this week by General Motors Corp. (NYSE:GM - news), the world's largest automaker and one of the biggest upside surprises in Friday's sales results.
Analysts had expected GM, which was alone among Detroit's Big Three automakers in booking a profit last year, to report a drop of as much as 10 percent in its February sales.
But GM -- which launched a new customer incentives program as part of Detroit's ongoing price wars on Friday -- said February sales actually rose 0.4 percent, as strong demand for its pickups and sport utility vehicles offset a drop in car sales, especially to businesses and other fleet customers.
In decidedly upbeat news for the resurgent GM, it said its venerable Chevrolet brand of cars and trucks was now outselling the Blue Oval nameplate at Ford for the first time since July 1991.
Heading into 2002, some analysts had feared that U.S. light vehicle sales -- which account for more than one-fifth of U.S. retail sales -- could drop to a seasonally adjusted annual rate of as low as 15.2 million vehicles in February from a unusually robust rate of 17.3 million in the same month last year.
Those forecasts were later revised upward to the range of January's 15.8 million sales rate. But February sales ran at an actual rate of 16.7 million vehicles.
Ford, the world's second-largest automaker, said its February sales dropped 13.5 percent, excluding Ford's import brands. While admitting it was ``not a gold medal month for Ford,'' George Pipas, the company's chief sales analyst, said he had earlier expected sales to drop as much as 20 percent from the same month a year ago.
At the Chrysler side of DaimlerChrysler AG (NYSE
CX - news), February sales fell 11 percent, less than the lower end of some forecasts. Gary Dilts, Chrysler's sales chief, said the first two weeks of February were slow but sales picked up markedly in the final half of the month.
``MILDEST RECESSION''
``February turned out to be a much better month than we expected,'' Pipas told industry analysts and journalists in a conference call.
``There's no question, I think, that consumers are getting back into the game. What remains to be seen is the extent to which the recovery progresses,'' he added.
Pipas was joined on the call by Jarlath Costello, Ford's senior U.S. economist, who all but declared the U.S. recession over, even as he predicted that a recent drop in consumer confidence and other business environment challenges could pave the way toward a slow recovery.
``This has been the briefest and mildest recession in post-war history,'' Costello said.
Despite generally good news from Detroit, foreign automakers were likely to continue gaining share in the U.S. market.
Toyota Motor Co. said February U.S. sales were up 1.7 percent and Nissan Motor Co. Ltd. said sales rose 8.8 percent.
Smaller foreign companies reported even larger gains.
South Korea's Hyundai Motor Co. Ltd. , touted as one of the global auto industry's undisputed success stories this year, said U.S. sales rose 15 percent and sales by Hyundai's Kia Motors Corp. subsidiary rose 38 percent. Mitsubishi Motor Corp. said sales rose 31 percent.
``If we can get away this year -- and sales hang in there somewhere between 15.5 and 16 million units -- at this time next year people are going to say 'Boy, that wasn't too bad,''' said analyst Michael Ward of Salomon Smith Barney, who noted that 2002 was off to a better start than many had predicted.
``It's kind of like, you tip-toe away and dodge a bullet,'' he added, saying dire recession-related forecasts for the U.S. auto industry were proving to have been wrong.
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