General Motors Corp. and Ford Motor Co. Thursday posted double-digit drops in their U.S. vehicle sales for June, losing market share again to Asian rivals as demand slowed throughout the entire industry.
GM and Ford’s surprisingly weak results sent sales for the industry down an estimated 4.5 percent to the lowest levels since February 2003, Paul Ballew, GM’s head of sales analysis, told reporters and analysts on a conference call.
U.S. vehicle sales, off from the previous year’s levels for the first time since last July, weakened last month because May results were far above expectations and pulled forward some sales, analysts said. Heavy incentives, which boosted May results despite gas prices topping $2 a gallon in most of the country, are also losing their effectiveness, they added.
The Chrysler arm of DaimlerChrysler AG, which reported a 1 percent gain in U.S. sales, was alone among the traditional Detroit automakers in posting a sales gain.
“There’s no question that there’s some payback from the really aggressive incentive program,” said Joe Phillippi, a consultant and former Wall Street automotive analyst. “As the result of ever more aggressive incentives ... sooner or later you reach some levels of saturation.”
With June’s weak results, GM and Ford said that inventories of unsold vehicles climbed last month, but neither cut their car and truck production estimates for the third quarter, which usually indicates that higher incentives are on the way.
GM and Ford both lost market share during the first half of the year, and officials acknowledged it would be difficult for them to recover over the remainder of the year.
“We’ve got a tough road ahead of us with regard to market share,” GM’s Ballew said.
With results for most automakers reported, sales are expected to show a drop to a seasonally adjusted annual rate of 15.6 million, Ballew said. That’s down from a weak rate of 16.3 million that analysts had expected and the 16.5 million rate in June last year.
Nissan Motor Co. Ltd. sales rose 9 percent in June, but the Japanese automaker had routinely recorded double-digit gains in sales in past months. Nissan’s Infiniti luxury brand had its best June ever, due to strong sales of its new QX56 sport utility vehicle.
“Everybody was saying that June was a challenging month,” said Jed Connelly, the head of Nissan North America’s sales and marketing. “One of the things I tell our guys ... take a look at May and June and divide by two. May was bigger than it maybe should have been.”
Honda Motor Co. said its sales rose 1.1 percent, and it posted its strongest June ever, due to strong sales of its Odyssey minivan and its Accord sedan.
Sales rates in June are adjusted for an extra selling day vs. the same month last year.
