Auto sales slip 3% in June

Auto sales slip 3% in June
Domestic firms decline, Asian rivals increase

Detroit automakers, which continue to battle consumer concerns over gas prices and a sluggish housing market, saw their new car and truck sales fall in varying degrees in June.

Industrywide U.S. sales in June fell 3% to 1.4 million from 1.5 million in June 2006, according to Autodata Corp. of Woodcliff Lake, N.J.
Sales were down the most, 21.3%, at General Motors Corp. Ford Motor Co. and the Chrysler Group posted declines of 8.2% and 1.4%.

Including German luxury brand Mercedes-Benz, DaimlerChrysler AG sales fell 1.8%.

For the first half of the year, industrywide sales are down 1.5%, with all of Detroit's automakers taking a hit.

Overall, passenger cars are down 1.8%, while light trucks are down 1.2%.

The economic headwinds didn't prove too strong for top Asian automakers, however. Fuel-efficient, car-heavy lineups -- and rising incentives -- boosted sales for the top four Asian rivals by more than 10% each.

Sales were up 10.2% at Toyota Motor Corp., 11.5% at Honda Motor Co., 22.7% at Nissan Motor Co. and 10.9% at Hyundai Motor Co.

While incentives declined for GM, Ford and Chrysler, they soared 56.5% at Toyota and 17.4% at Honda, Autodata estimates.

Incentives at Nissan, which also ran an ad campaign promoting its fuel economy, declined 4% in June.

GM said it was hurt by the economic conditions as well as the discounting by competitors, especially in the pickup market by Toyota. The Chevrolet Silverado and GMC Sierra both posted declines of more than 20% in June, compared with the same month a year ago.

"It was a tough quarter and a first half that was weaker than we expected," Paul Ballew, GM's executive director of global market and industry analysis, said during a conference call with journalists.

Last June was also a disappointing month for GM, with sales off 12.3% despite a 72-hour-sale at the end of the month. Ballew said GM is reevaluating its marketing plan.

"If we have to make some changes in our incentive play, we will, because we are not going to cede ground in a category that we feel we're best in class in," he said.

Chrysler, meanwhile, credited its better performance in the soft market to its "Maximize Your Miles" program, which gave car sales, especially the new Sebring and Crossfire, a 55% boost over the previous year.

"This allowed us to gain considerable momentum with consumers regarding our key vehicle offerings that achieve around 30 miles per gallon," said Michael Keegan, Chrysler vice president of volume planning and sales operations.

In Dearborn, Ford boasted that its popular new crossovers, the Ford Edge and Lincoln MKX, drove retail sales to their strongest level at the company since October 2006. Retail sales exclude discounted, bulk fleet sales to rental car companies and other institutions.

"People are starting to get their chin up again," Ford's top sales analyst, George Pipas, said during a conference call with journalists.

Jim Lentz, Toyota Motor Sales executive vice president, acknowledged the company has been using bigger incentives on some models. The new Toyota Tundra pickup posted a 146% increase over last year, but the gain was helped by offers of $3,500 cash back or 0% financing for 60 months.

"This is not an indication of a change in strategy for us on incentives," Lentz said. "We still will use incentives only tactically when necessary."

source : www.freep.com