G.M.’s Car Sales Rise in an Otherwise Tough Month

DETROIT — Automakers got off to a rough start in 2008, as expected, but General Motors served up a surprise on Friday with higher sales in January on strong demand for its new car models.

G.M. was the only major company that sold more vehicles last month than in January 2007 — 2.8 percent more. Even the three Japanese automakers reported declines on Friday, an extremely rare occurrence, as did Ford Motor and Chrysler. Chrysler fared the worst, down 12.1 percent, as sales of its sport utility vehicles and pickups plunged.

Over all, sales fell 4.3 percent, making January the industry’s worst month since October 2005, according to Autodata, a statistical tracking firm. Unlike late 2005, when the Detroit automakers sapped demand by offering deep summer discounts, last month’s decline fell squarely on the sluggish economy.

Auto executives said the two recent interest rate cuts by the Federal Reserve and the tax rebate checks that Americans can expect this summer should help bring people into showrooms. The rebates were included in the 6 billion stimulus package passed last week by the House.

“We think it will boost consumer confidence. They’ll feel better about themselves,” G.M.’s chief sales analyst, Mike DiGiovanni, said. Most taxpayers would receive 0 to ,200 under the House measure. The Senate is now debating the package.

“It will be immediate in terms of a psychological impact,” Mr. DiGiovanni said. “And for our business, consumer confidence is really the key.”

Low consumer confidence, along with high gasoline prices and a housing slowdown, were a drag on auto sales through much of 2007. Analysts and the carmakers’ economists predict that Americans will buy fewer than 16 million vehicles this year, the lowest number since 1998.

Last month’s sales were the equivalent of an annualized rate of 15.24 million, although January is typically the weakest month for car dealerships.

Despite the drop in demand, Detroit automakers say they are trying hard to avoid the big discounts that in the past produced quick gains but hurt long-term prospects. Chrysler and Ford both reduced incentives on a per-vehicle basis in January, according to Edmunds.com, which gives car-buying advice to consumers.

But discounting cost G.M. more than ,400 a vehicle last month, about the same as in December but nearly ,000 more than in January 2007. It was a big reason that G.M. managed to buck the trend.

“The people that were out there shopping were really concentrating on price,” said Jesse Toprak, director of industry analysis at Edmunds. “They were also very aggressive in terms of their marketing.”

Mr. Toprak said the automakers must be careful in their wooing of consumers who, spurred by lower rates on auto loans or a check from the government, decide to start shopping for a car.

“They don’t want to tip the balance back to the days of 2001 and 2002, when everything was about zero-percent financing,” he said.

Ford’s head of marketing, James D. Farley, responding to a report that the company plans to increase discounts this year to ensure that its older products are competitive, said the biggest offers will be available “in certain regions and certain vehicles in certain months.”

“We will continue to be very opportunistic and targeted with our incentives,” said Mr. Farley, who joined Ford from Toyota Motors in 2007.

All three Detroit automakers said they pulled back on less-profitable sales to rental-car companies last month, but while G.M.’s dealerships sold more than enough vehicles to compensate for that reduction, Ford’s and Chrysler’s did not.

The higher sales, combined with cuts in production, left G.M. with its smallest inventory of unsold vehicles since 1983.

Sales of G.M.’s two most significant models rose dramatically. It sold 82 percent more of the Chevrolet Malibu, a midsize sedan that was redesigned to make it more competitive with the Honda Accord and the Toyota Camry. Sales of the Cadillac CTS nearly doubled from a year earlier.

January showed how far all three Detroit companies have come in their efforts to build more appealing sedans and hatchbacks after years of ignoring cars to focus on the more lucrative S.U.V.’s and trucks. Sales of the Ford Focus, a compact car redesigned for the 2008 model year, were up 44 percent. Chrysler, led by the Dodge Avenger, Dodge Caliber and Chrysler Sebring, sold 29 percent more cars than a year earlier.

Though lower truck sales made Chrysler the only Detroit automaker to lose market share last month, company executives said they were pleased with the results and that, perhaps more importantly, so was Chrysler’s new owner, the private equity firm Cerberus Capital Management.

“We’ve got our nose to the grind,” Steven J. Landry, Chrysler’s vice president for sales and marketing, said. “We hit all our internal targets for our owners.”