DETROIT – The U.S. auto industry experienced somewhat of a hangover in
June after red-hot sales in May, but it was the nation's two largest
automakers that suffered the most.
General Motors Corp. and Ford Motor Co. both posted unexpectedly large
double-digit sales declines last month and continued to lose business to
foreign rivals.
But DaimlerChrysler AG's Chrysler Group, the No. 3 U.S. automaker, rode
strong demand for its new Chrysler 300 flagship sedan to a 5.5 percent
increase in car sales and a 1 percent overall gain.
Among foreign brands posting higher year-over-year results were Toyota
Motor Sales USA, American Honda Motor Co., Nissan North America, Hyundai
Motor America, Kia Motors America 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
percent. Chrysler sold 1,135,898 vehicles during the same period.
June's seasonally adjusted annual sales rate, or SAAR, was 15.4 million
units, compared with 16.5 million a year ago and 17.8 million in May.
The rate indicates what sales would be for the full year if they
remained at the same pace for all 12 months. Full-year sales for 2003
were 16.7 million.
Analysts predicted overall June results would be lower than a year ago
and down significantly from May's torrid selling pace, but 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."
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 climbed 9 percent in June.
"I expect July and August to be very good months," Connelly said.
"There's a lot of good inventory out there. I think it's going to be a
great time to buy a car and a very competitive time to sell a car."
Kia was up 31 percent in June, Hyundai 14 percent, BMW 8 percent and
Honda 1 percent.
Percentages are adjusted and based on the daily sales rate; there were
25 selling days last month and 24 in June 2003.
Market share for Detroit's Big Three was 58.5 percent in June, down from
61.6 a year ago, according to Autodata Corp. At the same time Asian
automakers grew their U.S. share to 34.5 percent in June from 31.3 a
year ago.
GM officials said earlier this week that June results were shaping up to
be below expectations, though its 15.6 percent drop from a year ago was
larger than most observers predicted. Car sales at the world's largest
automaker were down 15 percent, while truck sales fell 16 percent.
"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."
Sales of Ford's domestic brands were off 11.5 percent in June from a
year ago, as an aging car lineup hurt business. Sales of Ford, Lincoln
and Mercury cars were off 20.5 percent last month, while truck sales
were down nearly 7 percent.
Ford is experiencing a lull in car sales as it prepares for the launch
of new models such as the Ford Five-Hundred sedan and redesigned Mustang
later this year.
June marked the fourth time this year that Ford's overall sales were
below year-ago results.
In trading on the New York Stock Exchange, Ford shares lost 63 cents to
close at $15.02 while GM fell $1.11 to finish at $45.48 and
DaimlerChrysler's U.S. shares dropped $1.02 to close at $46.05.
