• by Karl Greenberg , February 6, 2007

While Chrysler Group and General Motors are touting elements of their January sales, the truth behind the sales number is not quite so clear.

The Big Three have noted that some of January's sales drop reflects a strategy of cutting sales to rental fleets, which aren't profitable and can hurt the brands.

Still, Chrysler, which ended the year with a huge inventory of unsold vehicles, said it posted its best January in six years, with overall sales of 1,567,308--up about a percent from last January. Incentives certainly played a part, since the company increased incentives on trucks last month.

General Motors, also touting its sales in terms of reduced volume to rental fleets and performance of specific vehicles, saw steep sales declines for Hummer and Pontiac.

Perhaps most disturbing: The Silverado pickup truck, which garnered strong reviews, has not come out of the gate sprinting. Silverado sales were down 20.9% in December, and last month were only up slightly over last January.

"Dealers are telling me that [Silverado] is not selling well, and it's because people aren't terribly excited about the styling," said Todd Turner, a consultant with Car Concepts, L.A, who attended last week's National Automobile Dealers Association meeting in Las Vegas.

"Silverado sales aren't strong enough for a brand new entry. It was down as much as the [Ford] F-Series in December [F-Series sales were off 21.1% in December, Ford said, and GM reported Silverado December sales off about 21%]. In January, Silverado sales were only up .7%. The segment is down overall, but still that's just astonishing."

Chrysler, which posted a $1.5 billion Q3 loss and will announce a restructuring plan later this month, launched 10 new vehicles later in 2006. Nearly all were aimed at seekers of higher mileage crossover-type vehicles. Chrysler credited the Jeep Commander SUV and Jeep Wrangler with giving that division a 19% improvement over last January.

In a year that promises to be highly contentious in the pickup truck market, the Dodge Ram accounted for 24,379 units sold--a 12% increase versus the month last year. Large incentives approaching $4,000 are likely responsible, says Turner. Chrysler has also cut as much as $10,000 off the price of the Dodge Durango, which is not selling well.

Minivan sales were also a strong point. Chrysler-branded vehicles are not doing as well, with the namesake division down 15%. The company also managed to cut inventory by 9% to a still-high 78 days. Industry average is around 60 days.

"The reality is that they put a whole lot of incentives on their vehicles, in January, and the dealers want even more," Turner said. "And they have really gone all out for the Ram."

Toyota racked up best-ever January sales at 175,850, a 5.1% increase versus last year, with the Toyota division up 4.7% and Lexus up 8%.

Both GM and Ford said lower sales are consequent to lower fleet sales. Both companies said January sales declines reflected a deliberate tightening of deliveries to rental fleets.

Both companies posted around a 19% decline in January--GM actually posted a 19.7% drop in sales for the month versus January 2006.

The company, which like Ford, has rolled out new crossover vehicles, posted January sales of 296,003. With gasoline prices lower, truck sales have picked up for GM, which garnered a 7% increase in full-sized truck sales for vehicles like Chevrolet Silverado and Avalanche and GMC Sierra.

While specific GM cars Chevrolet Aveo, and mid-sized war-horses like Impala and the newish Buick Lucerne, did fair-to-middling last month, GM's overall sales in cars plummeted 27.3% last month because of steep declines in sales of models like Pontiac G6, Chevy Malibu and Cobalt and Buick cars.

Divisionally, Pontiac saw a 38.5% decline; Buick was down 32.8% and Hummer was off 26.7%. The only divisions in which the company did not report double-digit decreases were GMC and Saab.

A bright spot may be the company's new crossovers GMC Acadia and Saturn Outlook, which the company said helped its mid-utility business grow 132% versus a year ago, when GM only had traditional truck-based SUVs competing in that segment.

Ford, which reported its greatest yearly loss ever for 2006, posted a 19% decline in January sales. The company attributes that in part to a decline in rental fleet sales, which the company said declined 65%.

Mark Fields, president of Ford's American operations, reiterated the "Way Forward" plan of cutting the company's size to be "profitable at lower volumes." He said Ford benefits from cutting fleet sales because it lifts residual values--a trend already seen with its newest products. Those include Ford's first crossover Edge, which in January, its first month, accounted for 5,586 units delivered, while sibling Lincoln MKX accounted for 1,699 units sold.

A bright spot for the company was its Mazda division, which reported its best January since 1994, selling 19,265 vehicles--a 6% increase over January last year.

The company has had strong continued success with its Mazda3 car, and the year-old Mazda5 quasi van has accounted for 1,326--up 8.7%. The company starts selling the CX-9 van this month.

Nissan reported sales of 82,644 vehicles last month, a 4.5% improvement versus the previous January. Nissan-branded cars and trucks enjoyed a 4.3% improvement, while Infiniti posted a sales increase of 6.8%.