Auto Sales Fell to Lowest Rate in 4 1/2 Years

By DANNY HAKIM, NY TIMES

DETROIT, March 3 — Sales of the lucrative, gas-guzzling giants of the auto industry — the Escalades, Excursions, Suburbans and other big sport utility vehicles — are sliding, according to figures released today.

Analysts said that rising gas prices and a drumbeat of criticism of S.U.V.'s figure in the slowing sales. But the biggest culprit, they said, is a new wave of small and medium-size sport utilities from Asian automakers that are chipping away at a crucial profit center for the domestic auto industry.

Over all, auto sales fell to their second-lowest pace in four and a half years last month, as snowstorms and worries about a possible war with Iraq tempered buying. Sales fell 6.7 percent from a year earlier, to a seasonally adjusted annual sales rate of 15.4 million vehicles.

Sales at General Motors fell 19 percent last month from a year earlier, and both Ford and G.M. said they were cutting their production levels for the second quarter, compared with a year ago.

Auto sales were a bright spot in an otherwise gloomy economy last year, but slowing assembly lines and slumping sales are a troublesome economic sign, and analysts said today that the carmakers' price wars had lost their novelty with wary consumers.

"Unless they're going to offer them two for one, I don't see how they're going to keep up the sales rates they had been so optimistic about," said Diane C. Swonk, an economist at Bank One. "At some point in time, we have market saturation."

Ford's sales were flat last month, and to maintain that pace, the company relied heavily on less lucrative sales to corporate and government fleets. The Chrysler Group's sales fell 4 percent.

"Three words: weather, war and worry," Gary E. Dilts, senior vice president for sales at Chrysler, said in a conference call today, summing up the mood over the last month.

Of particular concern to Wall Street is that Detroit's grip on the S.U.V. market is eroding, despite the Big Three's incentives — zero percent financing, loans as long as six years and cash-back offers of up to $3,000.

G.M., which has been the aggressive leader in ratcheting up Detroit's incentive war, said today that it would wait and see what its competitors did next to spur sales.

"Right now, we're going to have to evaluate where the playing field is," said Paul Ballew, the company's chief sales analyst.

In general, S.U.V.'s continue to gain in market share, but some shifting has been under way toward smaller and medium-size S.U.V.'s and so-called crossover utilities, which are engineered more like cars than pickups. The market share of the largest S.U.V.'s held steady in 2002, but now sales of some of them are in free fall.

Through February, sales of the Cadillac Escalade are down 28.8 percent compared with a year ago. The Chevrolet Suburban is down 39.7 percent and the Ford Excursion is down 24.3 percent.

The Ford Explorer, smaller than those behemoths, is down 10 percent, while sales of the company's smallest S.U.V., the Escape, are up 26 percent.

Sales of full-size pickups also showed signs of weakness. The Chevrolet Silverado is down 29.4 percent this year, while smaller pickups, like the Ford Ranger, are up 8.8 percent.

Some large S.U.V.'s from foreign brands are also taking hits, with the Mercedes M-Class down 28.6 percent this year.

While G.M.'s sales of light trucks — S.U.V.'s, pickups and minivans — have fallen 20 percent in the first two months of the year, Honda's generally smaller light trucks are up 27 percent, with a lift from sales of two new vehicles, the Pilot and the Element. In addition, the Kia division of Hyundai has added the Sorento, a small S.U.V., to the market in recent months.

George Pipas, the chief sales analyst for Ford, said the shift toward smaller trucks had been developing for some time and was probably affected only at the fringes by rising gas prices. Of large S.U.V.'s, he said, "The segment is large and is going to remain large for several years to come, but as a percentage of the total vehicle population, I see it declining."

Environmental groups welcome the shift in sales patterns.

"Maybe people are starting to realize that zero percent financing on a gas guzzler isn't such a deal in the first place," said David Friedman, a senior analyst at the Union of Concerned Scientists, an environmental group.

But he added that it was premature to proclaim any broad victory of environmental groups in altering consumers' purchasing decisions.

"There are a lot of pieces to the puzzle," he acknowledged.