Ford, GM Post Strong June Sales

U.S. auto sales maintained a strong pace in June with both Ford Motor Co. and General Motors Corp. on Friday reporting increases in monthly car and truck deliveries, topping off the industry’s best-ever first half.

The hot sales are making some Detroit officials so ebullient that they say there is no longer any doubt that the record sales of 16 million vehicles set in 1986 will be exceeded.

“I think we are beyond that,” said Bob Rewey, Ford group vice president for sales. “The question is fast becoming by how much will the industry sales record be eclipsed.”

Even though sales are expected to cool a bit in the next six months, in part because of this week’s modest increase in interest rates by the Federal Reserve, there appears to be sufficient momentum to surpass the record, industry analysts said.

“It will be a record year by a wide margin,” said David Healy, analyst for Burnham Securities.

Sales are being boosted by high consumer confidence, wage gains and low unemployment. In June, the fifth consecutive month they were above record levels, sales ran at a seasonally adjusted annual rate of 17 million.

Total car and light-truck sales in June totaled 1.6 million vehicles, up 2.3% from a year ago. For the year’s first six months, sales totaled 8.5 million, about 7% ahead of 1998’s strong levels.

The blistering sales pace is beginning to tax the manufacturing capability of some auto makers, resulting in long waits by consumers for some popular vehicles.

For instance, the wait for the Honda Odyssey minivan is up to six months at most dealerships. Other vehicles reported to be in short supply are the Ford Mustang sports car, the Toyota Tundra pickup truck and the Audi TT coupe.

Inventories could become even tighter in the coming weeks as Detroit auto makers close some factories in the next two weeks for their annual two-week vacation.

Nationwide, vehicle inventories are estimated at a 53-day supply, down from 64 days a year ago, according to the National Automobile Dealers Assn. A normal healthy supply of vehicles is between 60 and 70 days.

GM, the nation’s No. 1 auto maker, reported sales increased 0.8% in June to 497,047. Its car sales increased 2%, but truck sales fell 0.4%. Still, truck sales were the second best in history.

“We had our best sales month in 10 years,” said Roy Roberts, vice president of GM’s North American sales.

Analysts said GM boosted sales by offering regional incentives of as much as $2,000 a vehicle in an effort to lift its sagging market share. Acknowledging it is using rebates selectively, Roberts said GM’s incentives are comparable to those of rivals.

Still, GM’s market share continues to lag. For June it hit 30.4%, down from 31% a year ago. For the year, GM’s market share totals 29.5%, down from 31.3% for the same 1998 period. Roberts conceded GM would not reach its “stretch target” of 32% market share this year.

Meanwhile, Ford reported that sales of its Ford, Mercury, Lincoln, Jaguar and Volvo brands increased 4.5% in June, making it the best monthly performance in the company’s storied history.

“June was a sensational month for Ford and the industry,” Rewey said.

Sales of the Ford brand, however, declined nearly 1% as car sales slipped 2.3% and truck sales increased less than 1%. Lincoln-Mercury sales climbed 12% and Volvo was up 1%. Jaguar sales more than doubled in June and are up 23% for the year on the strength of the company’s new S-type luxury sedan.

Like GM, Ford’s market share slipped slightly in June to 25.7% from 26% a year ago. DaimlerChrysler, which reported sales on Thursday, saw its overall sales drop 4.5% in June. Sales of Chrysler, Dodge, Plymouth and Jeep brands were down 5.3% because of a decline in demand for the company’s minivans. Sales of its luxury Mercedes vehicles were up 8%.

The domestic manufacturers continued to lose market share to both European- and Asian-based auto makers. Analysts attributed the trend to the introduction of strong, new products and inroads into the truck arena, a segment dominated by Detroit auto makers.

Toyota Motor Corp., for instance, reported a 4.9% increase in U.S. sales, boosted by sales of its new Tundra full-size pickup. And Honda Motor Co. gained 1.6% as sales of its Odyssey minivan increased.

Among European makers, Volkswagen’s sales rose 23%, its best June since 1973, and Audi sales increased 44%.