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Ford's Dec. U.S. Sales Fell 7.7%; Chrysler's Rose 2% (Update2)

Jan. 5 (Bloomberg) -- Ford Motor Co.'s December U.S. auto sales fell 7.7 percent as the world's second-largest automaker reduced incentive spending. DaimlerChrysler AG's Chrysler unit rose 2 percent as it spent more on rebates and loan discounts.

Sales at Ford totaled 292,209 cars and trucks, the world's second-largest automaker said in a statement. Chrysler sold 182,831 vehicles as its trucks rose 6 percent from the year- earlier month.

The U.S.-based automakers have sought to lower spending on incentives, which reduce profit. Ford reduced its average per vehicle to $4,271 last month from $4,396 in November, according to CNW Marketing Research. The average at Chrysler, the third- biggest U.S. automaker, rose to $4,394 from $4,351.

``The question is, do you want to make money or do you want to grab share,'' William Clay Ford Jr., chief executive of Dearborn, Michigan-based Ford Motor, told reporters yesterday at the North American International Auto Show in Detroit.

Automakers through November last year spent $55.8 billion on incentives, a 16 percent increase from 2002 and more than their product development budgets, Bandon, Oregon-based CNW. In the third quarter, General Motors Corp.'s profit from making cars fell 91 percent and Ford had a pretax loss of $609 million from autos.

Last month, the total seasonally adjusted annual sales rate fell to 17.7 million cars and trucks from 18.3 million in December 2002, according to the average forecast of analysts and economists surveyed by Bloomberg.

The analysts' average estimate for General Motors was for a 9 percent drop, and they forecast declines of 6,8 percent for Ford and 3 percent for Auburn Hills, Michigan-based Chrysler.

Lowest Since 1928

December's drop may mean that Ford's U.S. brands -- Ford, Lincoln and Mercury -- captured less than 19.7 percent of U.S. sales last year, down from 20.2 percent in 2002 and the lowest since 1928, according to Automotive News, a trade publication.

Ford said the drop without adjusting for one more sales day last month was 4 percent from the year-earlier month. On that basis, its car sales fell 16 percent, including a 53 percent slide for the Taurus. Ford's truck sales rose 1.8 percent on that basis, including a 16 percent gain for the F-Series pickup trucks.

Chrysler benefited from an 11 percent rise for its Dodge Ram pickup, the automaker's top-selling vehicle. Sales of the redesigned Durango sport-utility vehicle increased 26 percent.

Through November, General Motors, Ford and Chrysler had 61.8 percent of the U.S. market, down 1.2 points from a year earlier, as Toyota Motor Corp. and other Asia-based makers rose 1.2 points to 32.8 percent.

General Motors also reduced incentives in December, to $4,328 from $4,406 in November. Toyota's rose to $2,766, its highest of the year, from $2,717 in November, CNW said.

Ford shares rose 25 cents to $16.33 at 1:01 p.m. in New York Stock Exchange composite trading. Stuttgart, Germany-based DaimlerChrysler's U.S. shares gained 74 cents to $47.48, and General Motors climbed 35 cents to $53.99.

Last Updated: January 5, 2004 13:04 EST

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