Posted on: Friday, July 2, 2004
GM, Ford sales down sharply
By John Porretto
Associated Press
DETROIT — The U.S. auto industry experienced somewhat of a hangover in June after red-hot sales in May, but it was the nation's two largest automakers that suffered the most.
General Motors Corp. and Ford Motor Co. both posted unexpectedly large double-digit sales declines last month and continued to lose business to foreign rivals.
But DaimlerChrysler AG's Chrysler Group, the No. 3 U.S. automaker, rode strong demand for its new Chrysler 300 flagship sedan to a 5.5 percent increase in car sales and a 1 percent overall gain.
Among foreign brands posting higher year-over-year results were Toyota Motor Sales USA, American Honda Motor Co., Nissan North America, Hyundai Motor America, Kia Motors America and BMW.
Toyota, the No. 1 Japanese automaker and No. 4 behind GM, Ford and Chrysler in U.S. sales, ended its best-ever six months of sales in 47 years of business in the United States. The automaker sold 1,004,636 new cars and trucks in the United States through June, when sales were up 5 percent. Chrysler sold 1,135,898 vehicles during the same period.
June's seasonally adjusted annual sales rate, or SAAR, was 15.4 million units, compared with 16.5 million a year ago and 17.8 million in May. The rate indicates what sales would be for the full year if they remained at the same pace for all 12 months. Full-year sales for 2003 were 16.7 million.
Analysts predicted overall June results would be lower than a year ago and down significantly from May's torrid selling pace, but said a strengthening economy should bode well for business the rest of the year.
"There's no doubt higher gasoline prices over the last few months have temporarily affected retail spending," said Jim Press, executive vice president of Toyota's U.S. arm. "However, we're already seeing a rise in consumer confidence and a softening of fuel prices. The combination should result in an upswing in industry sales this summer."
Most industry executives say they don't expect slowly rising interest rates to depress business much in the coming months.
"Everyone's been talking about it for probably six months, and rates are still at historically low levels," said Jed Connelly, senior vice president for sales and marketing at Nissan's North American affiliate, where sales climbed 9 percent in June.
"I expect July and August to be very good months," Connelly said. "There's a lot of good inventory out there. I think it's going to be a great time to buy a car and a very competitive time to sell a car."
Kia was up 31 percent in June, Hyundai 14 percent, BMW 8 percent and Honda 1 percent.
Percentages are adjusted and based on the daily sales rate; there were 25 selling days last month and 24 in June 2003.
Market share for Detroit's Big Three was 58.5 percent in June, down from 61.6 a year ago, according to Autodata Corp. At the same time Asian automakers grew their U.S. share to 34.5 percent in June from 31.3 a year ago.
GM officials said earlier this week that June results were shaping up to be below expectations, though its 15.6 percent drop from a year ago was larger than most observers predicted. Car sales at the world's largest automaker were down 15 percent, while truck sales fell 16 percent.
"Coming off strong May sales, GM's June sales were weaker than we expected," said John Smith, the company's group vice president for North American sales, service and marketing. "For the first half of the year, our sales were up slightly. For the second half, we need to accelerate our selling pace and produce stronger results."
Sales of Ford's domestic brands were off 11.5 percent in June from a year ago, as an aging car lineup hurt business. Sales of Ford, Lincoln and Mercury cars were off 20.5 percent last month, while truck sales were down nearly 7 percent.
Ford is experiencing a lull in car sales as it prepares for the launch of new models.
June marked the fourth time this year that Ford's overall sales were below year-ago results.
In trading on the New York Stock Exchange, Ford shares lost 63 cents to close at $15.02 while GM fell $1.11 to finish at $45.48 and DaimlerChrysler's U.S. shares dropped $1.02 to close at $46.05.
