Automakers reported June sales plunged as consumers turned away from gas-guzzling trucks and found small cars in short supply. General Motors sales fell...
Automakers reported June sales plunged as consumers turned away from gas-guzzling trucks and found small cars in short supply.
General Motors sales fell about 18 percent and Ford was down 28 percent. Toyota dropped about 21 percent as the Japanese automaker wrestled with plummeting demand for Tundra pickups and a shortage of Prius hybrids. The industry’s overall 18 percent decline was the steepest in almost six years.
The results reported Tuesday demonstrate the rapid shift in buyers’ preferences toward cars while $4-a-gallon gasoline has caught automakers flat-footed, said analyst Alan Baum. Car shortages combined with the weakest economic growth in five years depressed the annual sales rate to 13.6 million, the lowest since 1993.
“The vehicles that people want are in short supply because the industry has turned on a dime in terms of demand, and supply can’t quite handle that,” said Baum, director of automotive forecasting for Planning Edge. “You’ll continue to see a decline for the next several months.”
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Sales up a bit
Honda, Hyundai and Volkswagen — which rely on smaller vehicles for their sales — each rose about 1 percent. After outselling U.S. automakers for the first time in May, Asian companies repeated the feat last month, according to Autodata.
For the second straight month, Ford’s F-Series large pickup, perennially the best-selling vehicle in the U.S., was outsold by four cars: Toyota’s Corolla and Camry and Honda’s Civic and Accord.
Chrysler, the U.S. automaker most dependent on trucks, dropped 36 percent. The automaker extended a promotion offering gasoline at $2.99 for new-vehicle buyers by more than three weeks, to July 31.
“In some cases, we’ve been outright constrained where dealers were just out of cars,” GM sales chief Mark Laneve said. He said the industry’s June sales would have been 40,000 higher had there been more cars available with four-cylinder engines.
Among the more than 20 U.S. models sold by Ford, only two posted gains last month: the Mercury Milan and Ford Fusion sedan. Ford’s percentage decline is higher because the previous year’s results included 5,570 sales from the Land Rover and Jaguar divisions, now owned by India’s Tata Motors.
A lack of supply of Ford Focus compact cars and other sedans was a “big factor” in the company’s sales fall, said Jim Farley, group vice president of sales and marketing.
The Chevrolet Silverado, GM’s best-selling vehicle, declined 24 percent while Chevy Cobalt car sales rose 22 percent. Automakers may get double the profit from the sale of a pickup over a small car, according to Citigroup analyst Itay Michaeli.
GM’s Hummer SUV division, which may be sold, lost 59 percent of its June 2007 sales. The Cadillac CTS and Chevy Malibu sedans posted gains of at least 16 percent.
Jim Lentz, president of Toyota’s U.S. sales unit, said limited supplies of batteries and other components continue to pinch supplies of its hybrid models. The company won’t be able to boost hybrid inventories until more battery-production capacity becomes available next year, he said.
Toyota now has only a 1-day supply of Prius cars, and five other models are at 15-day levels or less, Lentz said. The company sold 47 percent fewer Tundra pickups than it did a year earlier.
Last month had three fewer selling days than June 2007. That means some automakers reported unadjusted results roughly 12 percentage points lower than analysts’ adjusted estimates. By that measure, Ford’s 28 percent reduction was in line with the analysts’ forecasts of a 19 percent drop.
The month’s declines will extend the industry’s sales slump to eight straight months, the longest in seven years.
Average gas prices last month topped $4 a gallon and consumer confidence reached a 16-year low, prompting more Americans to delay new-vehicle purchases.