Another Downer for Detroit
by The Associated Press
High gasoline prices and a weak economy took a toll on U.S. sales of vehicles from Ford Motor (F), General Motors (GM), and Toyota Motor (TM) in June, with Toyota reporting a 21.4% decline on July 1 and Ford dropping 27.9%. However, GM managed to hold off Toyota to retain its traditional U.S. sales lead, despite seeing its own sales drop by 18% for the month.
All the reporting auto companies were hurt by a sluggish economy and poor sales of trucks and sport-utility vehicles. Industry analysts had predicted overall June industry sales could drop by double digits to their lowest monthly rate in 16 years.
GM reported selling 265,937 vehicles for the month, compared with Toyota's 193,234.
Toyota had been expected to fare better because it has a lineup more tilted toward small, fuel-efficient cars and crossover vehicles. But it didn't. Toyota said July 1 its car sales dropped 9.4% for the month, while its truck sales slipped 38.9%. For the first half of the year, Toyota sales were down 6.8%, while GM's were down 16.3%.
Blaming Low Consumer Confidence
Ford shares sank to a new 52-week low, while rival General Motors' shares were trading near their lowest level in more than a half-century. As of 2:30 p.m., Ford's shares were down 4¢, or 0.87%, to 4.77 a share after sinking to a 52-week low of 4.41 earlier in the session; GM's shares, trading near a 50-year low, were up 68¢, or 6%, to 12.18.
Dearborn (Mich.)-based Ford blamed the latest sales decline on high gas prices and low consumer confidence, which sent buyers to the sidelines. It reported steep drops in June sales of pickup trucks and sport-utility vehicles, including a 41% year-over-year decline for the F-Series pickup, a perennial best-seller, and a 52% drop for the Ford Explorer SUV.
U.S. auto sales had already fallen for seven straight months as of May, the longest period of consecutive monthly drops in eight years, according to the auto information Web site Edmunds.com.
When customers do buy, they're picking smaller cars, crossovers, and hybrids. The demand for more fuel-efficient vehicles has been a boon to Japanese automakers such as Toyota and Honda Motor (HMC), which rely less heavily on trucks and sport-utility vehicles than the Detroit Three.
For the first half of the year, Ford's sales were down 14% compared with the year-ago period.
Ford said sales of its smallest car, the Ford Focus, rose 28% in the first six months of the year, although Focus sales fell in June. The automaker said last month it plans to increase production of the Focus as well as the Mercury Mariner and Ford Escape small SUVs.
The Associated Press reports unadjusted figures, calculating the percentage change in the total number of vehicles sold in one month compared with the same month a year earlier. Some automakers report percentages adjusted for sales days. There were 24 sales days last month and 27 in June 2007.