U.S. automakers’ sales fall
Heavy discounting by Japanese car companies put a dent in U.S. automakers’ sales last month -- especially at General Motors Corp. -- and could signal good times ahead for consumers.
“The remainder of the summer is going to be a buyer’s market because GM isn’t going to just sit back and do nothing,” Jesse Toprak, an analyst with Edmunds.com, said Tuesday after the major automakers released their June sales reports.
“They’ve got to retaliate in terms of incentives, and that’s going to cause a chain reaction.”
GM sales plummeted almost 22% in June from a year earlier, its brands suffering across the board, with double-digit declines at Buick, Cadillac, Chevrolet, GMC and Pontiac. The automaker blamed the decline on its planned cutback of low-profit sales to rental companies and corporate fleets, although it conceded that competitors grabbed sales by offering richer incentives.
Japanese automakers offered an average incentive of about $1,500 per vehicle last month, compared with $1,260 a year earlier, according to Edmunds.com, a Santa Monica-based auto research firm. Average incentives offered by domestic automakers, while much higher at $3,200 per vehicle, were actually down 7% from a year earlier.
Toyota Motor Corp., in particular, shook up Detroit by offering zero-percent financing and cash rebates on its redesigned Tundra full-size pickup. Eager to capture a significant share of the large pickup market, Toyota offered the incentive package in an effort to fulfill its goal of selling 200,000 Tundras this year.
The tactic seemed to work. Tundra sales jumped 146% last month, while sales of GM’s flagship full-size pickups -- the Chevy Silverado and GMC Sierra -- tumbled more than 20%. Sales of Ford Motor Co.’s segment-leading F-150 pickup series were flat, a hopeful sign for the beleaguered automaker.
Overall, domestic automakers continued to lose ground to their Asian rivals in June as high gasoline prices and a shaky housing market damped sales of new vehicles. The share of the U.S. new-vehicle market commanded by GM, Ford and Chrysler Group fell to 50.2% in June from 56.1% a year earlier, according to sales figures compiled by Autodata Inc. Asian automakers, led by Toyota, expanded their market share to 42.7% from 37.3% in June 2006.
Overall, new-vehicle sales in the U.S. fell 3% last month from a year earlier to slightly fewer than 1.5 million. Light-truck sales -- which include SUVs -- dropped 6% as consumer continued to shun gas guzzlers. Pickup truck sales were also hurt by the struggles of home builders, a prime source of customer base.
Sales of fuel-efficient small cars, meanwhile, rose 4%. Gas-electric hybrids also continued to score gains, with sales of the Toyota Prius, the No. 1-selling hybrid, jumping 83%.
Sales of crossover vehicles, which have many of the characteristics of SUVs but typically deliver better gas mileage, also surged, climbing almost 19%. Strong sales of its Edge crossover and Escape compact SUV helped Ford notch its first gain in showroom sales since October, although the automaker’s overall sales fell 8% as, like GM, it continued to pull back from the corporate fleet and rental business.
Chrysler, which had the smallest sales decline among the Detroit Three at 1.4%, also got a boost from a small SUV. Sales of its Jeep Wrangler zoomed 93% as buyers flocked to the vehicle’s four-door version.
Tokyo-based Nissan Motor Co., which posted a sales gain of almost 23%, also benefited from the move toward more fuel-efficient vehicles, with sales of its compact Sentra rising 27%.
Toprak of Edmunds.com said that despite the overall decline in June sales, the industry was still on track for 16.3 million sales in the U.S. this year, fewer than last year, “but anything over 16 million is relatively healthy.”
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By the numbers
*--* June sales % change YTD (In thousands from market of units) June ’06 share GM 316.3 -21.7% 22.8% Toyota 245.7 +10.2 16.1 Ford 230.8 -8.0 15.6 Chrysler 183.3 -1.4 13.5 Honda 140.9 +11.5 9.3 Nissan 92.2 +22.7 6.5 Hyundai 49.4 +10.9 2.9 Kia 26.3 -4.2 1.9 Mazda 25.8 +8.6 1.9 BMW 25.2 +4.3 1.8
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Source: Autodata
