US automakers' June sales sag
US automakers' June sales sag
Monday July 3, 5:50 PM EDT
By Kevin Krolicki and Jui Chakravorty
DETROIT (Reuters) - U.S. sales fell for all three big American automakers in June, led by a 26 percent drop at General Motors Corp. (GM), while Japan's Toyota Motor Corp. surged.
Higher gas prices, slower sales of trucks and sport utility vehicles and a lack of deep incentives compared to last summer -- when GM rolled out employee-level pricing -- hurt the Detroit-based automakers in a weaker U.S. auto market.
The tough sales comparison comes at a time when GM's board is under pressure to consider a three-way alliance with Renault SA and Nissan Motor Co.
Ford's June sales dropped 7 percent and DaimlerChrysler's plunged 13 percent, underscoring the pressure on Detroit automakers at the start of a summer season they are counting on to clear an unsold inventory of 2006 models.
By contrast, Toyota -- now No. 3 in the U.S. market for cars and trucks -- posted a 14 percent sales gain. Toyota sold more cars in June than Ford and Chrysler combined.
Toyota's share of the total U.S. vehicle market rose to 15 percent in June, up from 12 percent a year earlier. The Detroit-based companies' market share sagged to 56 percent, down from 62 percent.
"Toyota is unstoppable. They have the right product mix, the right price, the right image, and momentum of product," said analyst Jesse Toprak of industry tracking service Edmunds.com.
Overall, U.S. light vehicle sales -- cars, pickup trucks and SUVs -- fell to 1.5 million units, down 11 percent, according to industry tracking firm Autodata Corp.
Toyota has taken a bigger share of a weakening U.S. market on the fuel efficiency of its line-up, which trails only Honda Motor Co. in average fuel economy among major manufacturers.
In the first half of 2006, Toyota sales rose 10 percent, boosted by the revamped Camry sedan and the new Yaris subcompact. "We expect that sales pace is going to continue in the rest of the year," said Jim Lentz, executive vice president of Toyota Motor Sales.
He said Yaris sales were stronger than anticipated and Toyota was working to import them in higher volume from Japan.
Toyota has only a 9-day inventory of the Yaris, and an even tighter 4-day sales inventory of its Prius hybrid, essentially making both vehicles sellout hits.
Meanwhile, sales of Ford's Explorer, a best-selling SUV, dropped by 36 percent in June while sales of the larger Expedition were down 46 percent. "There's no question that higher gas prices have hurt demand for these products," said Ford sales analyst George Pipas.
Auto executives said there were signs that consumers were also waiting for better deals in July, when both GM and Chrysler rolled out new discount offers.
CHRYSLER INCENTIVES UP, SALES DOWN
The weak June numbers capped a rough quarter for Chrysler, the only Detroit-based automaker to post a profit in the first quarter. Chrysler saw its inventory balloon to 91 days of sales at the end of June, and has had to resort to the biggest discounts in the industry this year.
DaimlerChrysler's first-half U.S. sales were down 5 percent as a 17 percent gain for Mercedes-Benz was more than offset by a 3 percent drop for the bigger-volume Chrysler brand.
Chrysler is attempting to shore up its flagging sales with the most aggressive discount offer of the year, combining employee-level pricing with zero-percent financing and a 30-day money back guarantee.
Chrysler executives said they were confident that would boost July sales and run down a glut of almost 648,000 unsold vehicles, with trucks representing almost 85 percent of the total.
GM said its June result, in line with the company's cautionary forecast, was on track with the terms of its restructuring plan, which includes a dozen plant closings and some 30,000 job cuts.
The year-on-year GM decline reflected an unusually strong performance in 2005 when it rolled out an employee pricing offer that touched off a summer price war in Detroit.
GM has vowed to avoid cutting margins through a similarly sweeping program this year, saying last year's discounts hurt the image of its brands and the resale value of its vehicles.
GLOBAL POWERHOUSE?
Billionaire investor Kirk Kerkorian is looking to broker the three-way alliance among GM and Nissan-Renault. Such a tie-up would create a global automotive powerhouse with almost twice the sales of Toyota, the No. 2 automaker worldwide.
The boards of Nissan and Renault on Monday approved discussions about the deal.
But Nissan has struggled in the U.S market this year, and its June sales tumbled by 19 percent.
Nissan's difficulties have included a disruptive move in its headquarters to Nashville, Tennessee, production cuts and an embarrassing recall of some Altima and Sentra sedans due to evidence of engine fires.
Rival Honda Motor Co. , which is building a new U.S. assembly plant to keep up with demand, posted flat overall sales in June. Strong sales for its fuel-efficient Fit and Civic models were offset by declines in truck sales and for its Acura luxury line.
©2005 Reuters Limited.
© 2006 IAC Search & Media. All rights reserved.
Monday July 3, 5:50 PM EDT
By Kevin Krolicki and Jui Chakravorty
DETROIT (Reuters) - U.S. sales fell for all three big American automakers in June, led by a 26 percent drop at General Motors Corp. (GM), while Japan's Toyota Motor Corp. surged.
Higher gas prices, slower sales of trucks and sport utility vehicles and a lack of deep incentives compared to last summer -- when GM rolled out employee-level pricing -- hurt the Detroit-based automakers in a weaker U.S. auto market.
The tough sales comparison comes at a time when GM's board is under pressure to consider a three-way alliance with Renault SA and Nissan Motor Co.
Ford's June sales dropped 7 percent and DaimlerChrysler's plunged 13 percent, underscoring the pressure on Detroit automakers at the start of a summer season they are counting on to clear an unsold inventory of 2006 models.
By contrast, Toyota -- now No. 3 in the U.S. market for cars and trucks -- posted a 14 percent sales gain. Toyota sold more cars in June than Ford and Chrysler combined.
Toyota's share of the total U.S. vehicle market rose to 15 percent in June, up from 12 percent a year earlier. The Detroit-based companies' market share sagged to 56 percent, down from 62 percent.
"Toyota is unstoppable. They have the right product mix, the right price, the right image, and momentum of product," said analyst Jesse Toprak of industry tracking service Edmunds.com.
Overall, U.S. light vehicle sales -- cars, pickup trucks and SUVs -- fell to 1.5 million units, down 11 percent, according to industry tracking firm Autodata Corp.
Toyota has taken a bigger share of a weakening U.S. market on the fuel efficiency of its line-up, which trails only Honda Motor Co. in average fuel economy among major manufacturers.
In the first half of 2006, Toyota sales rose 10 percent, boosted by the revamped Camry sedan and the new Yaris subcompact. "We expect that sales pace is going to continue in the rest of the year," said Jim Lentz, executive vice president of Toyota Motor Sales.
He said Yaris sales were stronger than anticipated and Toyota was working to import them in higher volume from Japan.
Toyota has only a 9-day inventory of the Yaris, and an even tighter 4-day sales inventory of its Prius hybrid, essentially making both vehicles sellout hits.
Meanwhile, sales of Ford's Explorer, a best-selling SUV, dropped by 36 percent in June while sales of the larger Expedition were down 46 percent. "There's no question that higher gas prices have hurt demand for these products," said Ford sales analyst George Pipas.
Auto executives said there were signs that consumers were also waiting for better deals in July, when both GM and Chrysler rolled out new discount offers.
CHRYSLER INCENTIVES UP, SALES DOWN
The weak June numbers capped a rough quarter for Chrysler, the only Detroit-based automaker to post a profit in the first quarter. Chrysler saw its inventory balloon to 91 days of sales at the end of June, and has had to resort to the biggest discounts in the industry this year.
DaimlerChrysler's first-half U.S. sales were down 5 percent as a 17 percent gain for Mercedes-Benz was more than offset by a 3 percent drop for the bigger-volume Chrysler brand.
Chrysler is attempting to shore up its flagging sales with the most aggressive discount offer of the year, combining employee-level pricing with zero-percent financing and a 30-day money back guarantee.
Chrysler executives said they were confident that would boost July sales and run down a glut of almost 648,000 unsold vehicles, with trucks representing almost 85 percent of the total.
GM said its June result, in line with the company's cautionary forecast, was on track with the terms of its restructuring plan, which includes a dozen plant closings and some 30,000 job cuts.
The year-on-year GM decline reflected an unusually strong performance in 2005 when it rolled out an employee pricing offer that touched off a summer price war in Detroit.
GM has vowed to avoid cutting margins through a similarly sweeping program this year, saying last year's discounts hurt the image of its brands and the resale value of its vehicles.
GLOBAL POWERHOUSE?
Billionaire investor Kirk Kerkorian is looking to broker the three-way alliance among GM and Nissan-Renault. Such a tie-up would create a global automotive powerhouse with almost twice the sales of Toyota, the No. 2 automaker worldwide.
The boards of Nissan and Renault on Monday approved discussions about the deal.
But Nissan has struggled in the U.S market this year, and its June sales tumbled by 19 percent.
Nissan's difficulties have included a disruptive move in its headquarters to Nashville, Tennessee, production cuts and an embarrassing recall of some Altima and Sentra sedans due to evidence of engine fires.
Rival Honda Motor Co. , which is building a new U.S. assembly plant to keep up with demand, posted flat overall sales in June. Strong sales for its fuel-efficient Fit and Civic models were offset by declines in truck sales and for its Acura luxury line.
©2005 Reuters Limited.
© 2006 IAC Search & Media. All rights reserved.
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