GM and Ford Sales Drop in June After a Torrid May
The U.S. auto industry suffered something of a hangover in June after red-hot sales in May.
General Motors Corp. and Ford Motor Co. on Thursday reported that last month they had unexpectedly large double-digit sales declines from a year earlier and continued to lose business to foreign rivals.
But DaimlerChrysler’s Chrysler Group, the No. 3 U.S. automaker, rode strong demand for its new Chrysler 300 flagship sedan to a 1% gain in sales.
Among foreign brands posting higher year-over-year results were Toyota Motor Corp., Honda Motor Co., Nissan Motor Co., Hyundai Motor Co. and BMW.
Toyota, the No. 1 Japanese automaker and No. 4 behind GM, Ford and Chrysler in U.S. sales, ended its best-ever six months of sales in 47 years of business in the United States. The automaker sold 1,004,636 new cars and trucks in the United States through June, when sales were up 5%. Chrysler sold 1,135,898 vehicles during the same period.
Analysts had predicted overall June results would be lower than a year earlier and down significantly from May’s selling pace. They said a strengthening economy should bode well for business the rest of the year.
“There’s no doubt higher gasoline prices over the last few months have temporarily affected retail spending,†said Jim Press, executive vice president of Toyota’s U.S. arm. “However, we’re already seeing a rise in consumer confidence and a softening of fuel prices. The combination should result in an upswing in industry sales this summer.â€
Most industry executives say they don’t expect slowly rising interest rates to depress business much in the coming months.
“Everyone’s been talking about it for probably six months, and rates are still at historically low levels,†said Jed Connelly, senior vice president for sales and marketing at Nissan’s North American affiliate, where sales in June climbed 9%.
Hyundai was up 14% in June, BMW 8% and Honda 1%.
Percentages are adjusted and based on the daily sales rate; there were 25 selling days last month and 24 in June 2003.
GM executives said earlier this week that June results were shaping up to be below expectations, though its 15.5% drop from a year ago was larger than most observers predicted. Car sales at the world’s largest automaker were down 15%, while truck sales fell 16%.
“Coming off strong May sales, GM’s June sales were weaker than we expected,†said John Smith, the company’s group vice president for North American sales, service and marketing. “For the first half of the year, our sales were up slightly. For the second half, we need to accelerate our selling pace and produce stronger results.â€
Sales of Ford’s domestic brands were off 11.5% in June from a year earlier, as an aging car lineup hurt business. Sales of Ford, Lincoln and Mercury cars were off 20% last month, while truck sales were down 7%.
June marked the fourth time this year that Ford’s overall sales were below year-earlier results.
On the New York Stock Exchange, Ford shares lost 63 cents to $15.02, GM shares fell $1.11 to $45.48 and DaimlerChrysler’s shares dropped $1.02 to $46.05.
