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GM Sales Drop Less Than Expected

Ford Sales Drop 28% In June; Honda Up 13.8%

POSTED: 11:19 am EDT July 1, 2008
UPDATED: 2:34 pm EDT July 1, 2008

June won't be the month Toyota eclipses General Motors as the top U.S. auto seller after all.

High gasoline prices and a weak economy sent Toyota's sales for last month plunging more than 11 percent, while General Motors fell 8 percent, while analysts had been anticipating a drop of about 19 percent.

"Make no mistake about this -- Asian automakers do not have a monopoly on fuel-efficient vehicles," said Mark LaNeve, vice president of GM North America Vehicle Sales for service and marketing. "We have a full lineup of vehicles –- including five hybrid models. Every month, more and more customers are choosing our brands when shopping for a high value, fuel efficient vehicle."

The Japanese auto maker had been expected to fare better because it has a lineup more tilted toward small fuel-efficient cars and crossover vehicles. But that didn't happen, as Toyota's car sales dropped 9.4 percent for the month, while its truck sales slipped 38.9 percent.

"As the pendulum swings towards smaller, higher-mileage vehicles, we're well poised to offer the right products at the right time," said Toyota Motor Sales President Jim Lentz. "A five-door liftback will soon join the Yaris lineup, widening the choice for value-conscious consumers in challenging economic times."

GM sold 262,329 vehicles in June, compared with Toyota's 193,234.

For the first half of the year, GM sales were down 16.3 percent compared with the year-ago period. Toyota sales were down 6.8 percent for the first six months of the year.

Ford Motor Co. said its U.S. sales tumbled 27.9 percent in June as high gas prices and a weak economy deepened the trouble facing the company.

The company blamed the decline on high gas prices and low consumer confidence that are sending buyers to the sidelines. Ford reports steep drops in sales of pickup trucks and sport utility vehicles.

"Consumer fundamentals and consumer confidence deteriorated as the first half unfolded," said Jim Farley, Ford group vice president, marketing and communications. "The economy enters the second half of the year with a notable absence of momentum and a high degree of uncertainty."

For the first half of the year, Ford's sales were down 14 percent compared with the year-ago period. Ford's SUV declined 40 percent versus a year ago and retail sales for trucks and vans declined 31 percent.

Industry analysts expected June to be a dismal month for the industry with sales down double digits from last June. Only Honda was spared from a drop in June, increasing 13.8 percent for the month.

"Staying true to our core values is allowing Honda to weather the storm of rising gas prices and help consumers find shelter in our products," said Dick Colliver, executive vice president of American Honda. "Our factories are doing everything they can to produce the fuel-efficient models consumers are desperately in need of."

After the sales announcements, GM shares rose more than 3 percent after being down 3.7 percent in morning trading Tuesday.

Ford Motor Co. shares continued to fall after the announcement, falling more than 4 percent.

Chrysler hasn't announced its sales numbers for June, but the numbers were going to be lower.

"We're going to report much lower sales versus last year," Chrysler LLC Co-Vice Chairman Jim Press told reporters Monday as he and fellow Vice Chairman Tom LaSorda announced that the company would close a St. Louis-area minivan plant and cut a shift at a pickup truck factory due to sagging demand.

Press said consumers are looking for more fuel-efficient vehicles instead of trucks and sport utility vehicles.

That has been a boon for Toyota and Honda, which rely less heavily on trucks and SUVs.

Toyota had sold just 9,340 fewer vehicles than GM in May and grabbed 18.4 percent of the U.S. market compared with GM's 19.1 percent.

Toyota saw sales drop 4 percent in May, and the automaker has been unable to ramp up production of its Prius and Camry hybrids to meet demand.

Toyota spokesman John Hanson said the company set its production schedule well before the current run-up in gas prices and can't increase production because it doesn't have enough plant capacity or batteries and other specialized components.

Toyota makes 250,000 Prius hybrids per year, of which 60 percent to 70 percent are allocated to the United States. Hanson said Toyota has considered building a new U.S. plant to make the Prius and other hybrids but has made no decision on that. The Camry hybrid is produced at Toyota's plant in Georgetown, Ky., but many of its parts are shipped from Japan.



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