June Sales Shocker at Ford, GM - PeachParts Mercedes-Benz Forum

haasman · #1 07-16-2004, 02:12 AM

June Sales Shocker at Ford, GM
The wheels come off the incentive-and-rebate game.
(2004-07-05)

by Jack Gilbert

General Motors and Ford Motor Co. took two of the biggest hits in June's U.S. sales race. GM sales declined twelve percent, while Ford was off eight percent in comparison with June 2003. Volkswagen was also off significantly, registering a twelve-percent loss during the month. Mitsubishi, embroiled in financial trouble in Japan and an obvious marketing challenge in the U.S. was the market's biggest loser in June, checking in with a 46-percent decline, which drops the automaker's 2004 sales total 27 percent below the first half of 2003.

Still, most Asian automakers were able to maintain sizzling momentum in June. Toyota, Mazda, Honda, Hyundai, Nissan, and Suzuki all managed to register better than five-percent gains, leading the Asian automakers to historically high market-share levels. The Asian makers have gained more than two points in market share and currently are currently up 8.4 percent in sales.

The Toyota Prius and Mazda3 were notable Japanese winners in June, while the Kia Rio and Hyundai Sonata lifted Korean sales.

Overall, the U.S. market was off two percent, while the seasonably adjusted sales rate plummeted to below 16 million units from near 18 million last month. Ford's George Pipas calls the SAAR drop a slight surprise, but says the automaker pretty much expected a down industry in June and predicts a pretty cold summer in terms of sales. GM's Paul Ballew says in a conference call that GM's disappointing performance in a down market indicates the company "has a tough road ahead of us with regard to market share."

GM and Ford both had a difficult month selling trucks and that does not bode well for the top two American automakers, both of which rely heavily on trucks both for profitable vehicle sales and market share performance. Both automakers are looking to lay off incentives this summer, but neither seems to have the kind of standalone depth in their product lineups to support the sort of large volumes Detroit's Big Two have become accustomed to, many analysts were quoted saying Thursday.

Despite the down month for most of Detroit, U.S. vehicle sales are up 2.2 percent during the first half of the year vs. 2003. Chrysler managed to squeak by June with a one-percent gain in sales and remains about five percent better than last year in terms of sales. Chrysler Group Senior Vice President of Sales Gary Dilts credits new products, such as the 300C, and the strength of the Jeep brand for Chrysler's performance.

Chrysler's partner, Mercedes, was able to manage a positive month despite its down year, but it had to sit and watch BMW turn in a record month thanks to SUV sales. BMW light truck sales were up more than 110 percent. Porsche, which has been relying heavily of late on SUVs, actually saw its SUV sales down slightly from 2003. Nevertheless, the German sports car maker was able to rely on its roots, posting strong 911 sales on the way to an 18-percent overall sales gain during the month of June.