Ford Misses U.S. Sales Estimates as Spending Drops; Toyota, Honda Fall
Ford light-vehicle sales rose 5.9 percent to 180,315 vehicles, the Dearborn, Michigan-based automaker said today in a statement. The results trailed six analysts’ average estimate for a 7.6 percent gain. Toyota sales fell 23 percent to 130,802, and Honda deliveries plunged 28 percent to 80,502.
A slump in hiring is hurting confidence and leading consumers to retrench as vehicle inventories recover from the March 11 tsunami in Japan that disrupted production and led to vehicle shortages. July light-vehicle deliveries ran at a seasonally adjusted annual rate of 12.2 million, trailing the 12.5 million pace through the first half, Autodata Corp. said.
“The industry constraints are dissipating, but the economic constraints are stronger than what we thought,” Paul Ballew, chief economist for Nationwide Mutual Insurance Co., said in a phone interview. “Even with inventories marginally better, the selling rate looks comparable to June. For the remainder of the year, we’re focused on what the heck is happening from an underlying growth standpoint in the economy.”
The U.S. light-vehicle sales rate exceeded the 11.8 million pace that was the average estimate of 12 analysts surveyed by Bloomberg.
General Motors Co. (GM) deliveries climbed 7.6 percent to 214,915, the Detroit-based automaker said today in a statement. The results beat the 7 percent increase that was the average estimate of six analysts surveyed by Bloomberg.
Congressional debate over raising the $14.3 trillion U.S. debt ceiling combined with gasoline prices above $3.50 a gallon and limited supply of small vehicles in hindering total industry sales, Don Johnson, GM’s vice president of U.S. sales, said on a conference call.
“The economy has clearly lost some momentum,” Johnson said today. “We do believe that it will continue to recover, but more gradually than we originally anticipated as we move through the second half of the year.”
Consumer spending in the U.S. unexpectedly dropped in June for the first time in almost two years, Commerce Department figures showed today in Washington. Incomes grew at the slowest pace since November and the savings rate climbed to the highest since September.
GM and Ford have said that 2011 U.S. vehicle sales may be at the low end of their forecast of 13 million to 13.5 million vehicles, including medium- and heavy-duty trucks.
IHS Automotive will lower its estimate for full-year U.S. light-vehicle deliveries from 12.7 million, Rebecca Lindland, an analyst based in Lexington, Massachusetts, said today in a Bloomberg Television interview.
“We’re seeing consumers not have the confidence to spend,” Lindland said. IHS will lower its estimate as soon as tomorrow, she said in a telephone interview.
Employers added 18,000 jobs in June, the smallest gain in nine months, as the U.S. unemployment rate rose to 9.2 percent, the Labor Department said. The Thomson Reuters/University of Michigan index of consumer sentiment fell in July to 63.7, the weakest since March 2009.
Chrysler Group LLC, the automaker majority owned by Fiat SpA (F), said deliveries increased 20 percent to 112,026, beating the 15 percent gain that was the average of four analysts’ estimates. Sales of Chrysler’s Jeep Grand Cherokee and Wrangler sport-utility vehicles surged 76 percent and 43 percent, respectively, the Auburn Hills, Michigan-based company said.
Toyota sales of its Toyota, Lexus and Scion models were better than an expected decline of 25 percent, the average estimate of three analysts surveyed by Bloomberg. Honda, the Japanese automaker that relies most on sales to U.S. customers, had a bigger decline than the 23 percent drop that was the average of three analysts’ estimates.
Hyundai Motor Co. (005380), South Korea’s largest automaker, delivered 59,561 vehicles to U.S. customers in July, up 10 percent from a year ago, the company said in a statement. Kia Motors Corp. (000270), Hyundai’s affiliate, sold 45,504 vehicles.
Combined volume for Hyundai and Kia, which are partner companies that maintain separate operations in the U.S., totaled 105,065, trailing only GM, Ford, Toyota and Chrysler.
Nissan Motor Co., Japan’s second-biggest automaker, said U.S. sales rose 2.7 percent to 84,601 cars and light trucks. Deliveries for the Yokohama-based company were expected to be little changed from a year earlier, according to the average of three analysts’ estimates.
Industry sales will rebound in the second half as availability of vehicles increases, said Alan Baum, a West Bloomfield, Michigan-based industry consultant at Baum & Associates. The improved supply, still recovering from the March earthquake and tsunami in Japan, will likely lead to lower vehicle pricing late in the year, he said.
“The issue is going to be how aggressive Toyota and Honda in particular are in terms of pricing and trying to get their sales back in order,” Baum said today in a Bloomberg Television interview.
Industrywide vehicle inventory climbed to 54 days’ supply at the beginning of July, from 49 days in June, J.D. Power & Associates said in a July 21 statement. Car inventory started the month at a 43-day supply, with models such as Toyota’s Prius and Honda’s Civic below 25 days, the Westlake Village, California-based researcher said.
Deliveries of GM’s Chevrolet Cruze compact slipped 1 percent to 24,648 from June, when it was the industry’s best- selling car. Cruze in July finished behind the Toyota Camry sedan at 27,016. GM ended the month with about 28,000 Cruzes in inventory, or about 30 days supply, Johnson said yesterday.
Sales of Ford’s Focus compact fell 3.4 percent to 14,889. Inventory of the model is one-fourth of year-earlier levels, said George Pipas, the automaker’s sales analyst.
“Some of our dealers are literally selling them right off the truck,” Ken Czubay, Ford vice president of U.S. sales, said on a conference call.
Ford’s 5.9 percent increase in sales reflects year-ago deliveries of Volvo models. Ford has since sold the brand.
Jay Dunphy, president of Dunphy Motors, a Ford dealer in Philadelphia, said last week his store had three Focus cars and three Fiesta subcompacts in stock.
“We would love to be able to have about 15 of them each,” Dunphy said in a telephone interview. “Ford has an accepted product that is being bought by the public. The biggest problem is availability.”
Sales of Ford’s F-Series and GM’s Chevrolet Silverado pickups, the two top-selling models in the industry, declined in July. Silverado deliveries dropped 4.5 percent to 33,121, while F-Series slipped 2.7 percent to 49,104.
Inventory of Silverado and GMC Sierra full-size trucks fell to 115 days supply from 122 days at the end of June, Johnson said today. The automaker is targeting 200,000 pickups, or 90 days supply, by the end of the year, he said.
For now, “they seem to have dealer buy-in,” Michaeli said in a phone interview. “If that changes, they will have to cut production.”
GM fell $1.02, or 3.6 percent, to $27.05 at 4 p.m. in New York Stock Exchange composite trading. Ford declined 50 cents, or 4.1 percent, to $11.85.
July had 26 selling days, one fewer than a year earlier.
The U.S. averaged annual light-vehicle sales of 16.8 million vehicles from 2000 to 2007, according to researcher Autodata Corp. Deliveries climbed to 11.6 million in 2010 from a 27-year low of 10.4 million in 2009.
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