General Motors holds off Toyota as June sales fall - WMC Action News 5 - Memphis, Tennessee

General Motors holds off Toyota as June sales fall

DETROIT (AP) - General Motors Corp. soundly beat Toyota Motor Corp. in June to retain its traditional U.S. sales lead, but GM sales still dropped 18.2 percent during a dismal month for large automakers.

Toyota's U.S. sales fell 21.4 percent, while Ford Motor Co. said it sales tumbled nearly 28 percent. Chrysler LLC took a huge hit for the month with sales down 35.9 percent.

GM's shares bounced more than 2 percent higher in late trading Tuesday after sinking to their lowest level in more than a half century during Monday's session.

The nation's biggest automaker on Tuesday reported selling 262,329 vehicles for the month, compared with Toyota's 193,234. Some industry analysts had expected Toyota to beat GM in the U.S. for the first time, but both companies were hurt by a sluggish economy and poor sales of trucks and sport utility vehicles.

Toyota car sales fell 9.4 percent in June while its truck sales were off 38.8 percent.

GM's car sales sank 21 percent in June, while its incentive-boosted truck sales were off 16 percent.

For the first half of the year, GM sales fell 16.3 percent compared with the year-ago period. Toyota sales were down 6.8 percent for the first six months of the year.

Toyota took the global sales lead from General Motors in the first quarter, capitalizing on growth in China and Europe as GM saw its North American sales drag down gains in other markets. GM barely won the global sales race with Toyota last year, but Toyota overtook it as the world's top automaker as measured by global vehicle production in 2007.

To help boost sales, Chrysler said it would extend its $2.99 per gallon gasoline price guarantee through July 31. The guarantee lasts for three years, with Chrysler paying the difference between $2.99 and the pump price for 12,000 miles per year. It had been scheduled to expire July 7.

Even with the promotion, which had been in effect since early May, Chrysler's car sales were off 48.5 percent, while truck sales were down 30.1 percent.

The company said in a statement the down sales figures reflect a contracting market, especially for pickup trucks and SUVs, and continued reductions in fleet sales.

Honda Motor Co., with its car-heavy lineup, was the only major automaker to report a sales increase in June, a modest 1.1 percent. A 19.3 percent rise in car sales offset a 24 percent drop in trucks.

But Ford, still reliant on trucks and sport utility vehicles, saw its sales drop 27.9 percent.       Nissan Motor Co. also reported a bad month, with sales off 17.8 percent. The Japanese automaker saw truck sales plunge 36.1 percent and car sales fall 7.4 percent.

Industry analysts had predicted June auto sales could drop by double-digits to their lowest monthly rate in 16 years.

Dearborn-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 percent year-over-year decline for the F-Series pickup, a perennial best-seller, and a 52 percent drop for the Ford Explorer SUV.

George Pipas, Ford's top sales analyst, said SUV sales are probably down for good.

"Our view is that gas prices aren't likely to go down, and more importantly, many consumers have moved on," he said. "We believe that the segment has merit for certain consumers but is not likely to rebound at any point."

For the first half of the year, Ford's sales were down 14 percent compared with the year-ago period.

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.

Ford said sales of its smallest car, the Ford Focus, rose 28 percent in the first six months of the year, although Focus sales fell in June. Pipas blamed the decline on supply problems and a cut in sales to fleet buyers.

The automaker said last month it plans to increase production of the Focus as well as the Mercury Mariner and Ford Escape small SUVs.

Mark LaNeve, GM's vice president of North American sales, said industry analysts overestimated Toyota's sales and underestimated GM's.

He said it's not possible to quantify exactly how much GM's month-ending 72-hour sale boosted the June figures, he expects that GM's sales would have still beaten analysts' estimates even without it.

Despite slumping demand for light trucks, LaNeve said GM hasn't given up on selling them.       "We need to run hard, we're going to remain aggressive on the truck side of the market," LaNeve said. "It's still a significant part of the market and we're going to try and gain share."

Ford shares sank to a 52-week low of $4.41 early Tuesday but recovered to finish at $4.71, down 10 cents. They have traded as high as $9.64 over the past year.

GM shares rose 25 cents, or 2.2 percent, to close at $11.75 on Tuesday after briefly falling as low as $10.57 during Monday's session. That was the lowest level for GM since Sept. 22, 1954, according to the Center for Research in Security Prices at the University of Chicago.

The Associated Press reports unadjusted auto sales 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.

 

(Copyright 2008 by The Associated Press.  All Rights Reserved.)

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