Advertisement
YOU ARE HERE: LAT HomeCollections

Vehicle Sales in U.S. Decline 10.5% in June

Domestic carmakers post an 18.7% drop, while Asian rivals see an increase of 2.8%.

July 04, 2006|John O'Dell | Times Staff Writer

U.S. auto sales dropped sharply in June as many motorists apparently remained wary of continued high gasoline prices and waited for a new round of steep discounting that many analysts expect will be launched after today's holiday.

Toyota Motor Corp. was the one bright spot, continuing its string of monthly sales increases with a 14.4% gain from a year earlier.

General Motors Corp. said sales for the month plunged 25.7% from its record June 2005, when the company began offering all customers the same discounts given to its employees.

Industrywide, passenger vehicle sales fell 10.5% in June from a year earlier and were off 2.4% in the first six months compared with the first half of 2005.

U.S.-based automakers saw their collective sales drop 18.7% in June. Asian companies' sales rose 2.8%, and European brands, including those affiliated with American automakers, posted a 0.5% gain.

Still, with interest rates rising and fuel prices hovering near $3 a gallon, "it wasn't a bad month and it's not a bad market," said Jesse Toprak, an analyst at automotive information service Edmunds.com in Santa Monica.

Even at GM, despite its big June decline, there are signs of life as most of the new cars and trucks it has launched in the last year, including full-size sport utility vehicles, have posted strong sales, Toprak said.

Those small pluses could be a factor in GM's ultimate response to overtures from Renault of France and Nissan Motor Co. of Japan to join their alliance. The resulting global giant would produce more than 15 million vehicles a year, or about a quarter of all new cars and trucks sold worldwide.

GM is struggling to recover from a $10.6-billion loss last year fueled by falling sales, high operating expenses and soaring costs of raw materials and employee and retiree healthcare.

Still, any signs that GM is making headway with the recovery plan launched last year by Chief Executive Rick Wagoner could stiffen the automaker's resolve to go it alone. And Nissan itself is losing ground in the U.S. after two years of hefty sales gains.

GM said Friday that its board would consider the proposal, floated that day by Los Angeles investor Kirk Kerkorian, under which Renault and Nissan would collectively acquire a significant minority stake in the American automaker. Kerkorian holds a 9.9% stake in GM.

GM had issued no further comment as of Monday, but the boards of the French and Japanese companies said they wanted to proceed if GM was willing.

Renault owns a controlling 44% stake in Nissan, and the companies share a chief executive, Carlos Ghosn, celebrated in the auto industry for moving Nissan from the brink of insolvency to record profit in two years.

Analysts have been divided in assessing the potential of a GM-Renault-Nissan alliance, some suggesting that GM's U.S. operations, where its problems are concentrated, would see little benefit.

Nissan, now in the third phase of the turnaround begun in 1999, trails Japanese rivals Toyota and Honda Motor Co. in overall fuel efficiency and has been hurt recently by the recall of 97,000 of its popular Altima and Sentra sedans because of potential engine fires. The automaker's U.S. sales dropped 19% in June from a year earlier and were down 5.7% in the first six months of 2006.

Others believe that by joining forces, GM, Renault and Nissan could further pare costs of parts and raw materials through economies of scale and could help one another by sharing engineering, research and design resources. Nissan's present problems, Edmunds analyst Toprak said, "are temporary, and the designs that helped it recover could help GM as well."

On the sales front, June's story was in the continuing strength of Toyota. The company, No. 3 for the month behind GM and Ford Motor Co., was bolstered by its fuel-efficient small cars and gasoline-electric hybrids, notably the popular Prius sedan.

Toyota also benefited from a continuing market shift from large trucks and truck-based sport utility vehicles to so-called crossovers -- sport wagons and SUVs built on car platforms for improved handling and fuel economy at the expense of ruggedness.

Toyota was up 9.8% for the first six months, with June sales helped by its redesigned Camry sedan and the new Yaris subcompact. Toyota has surpassed Chrysler Group in sales for four straight months and held a 14.6% share of the U.S. market in the first half of the year, compared with Chrysler's 13.5%

GM continued to lead in market share, 24.1% for the first half, with Ford in second place at 17.3%, followed by Toyota, Chrysler and Honda at 8.9%.

Honda reported flat sales in June as increasing sales of its cars, particularly the compact Civic and subcompact Fit, were offset by shrinking sales of its Honda sport utility vehicles and Acura cars and SUVs.

As buyers turn to smaller cars and SUVs -- sales of Toyota's RAV4 small crossover sport utility more than doubled in June, and Kia Motors Corp.'s Sorento mid-size crossover rose 18% -- truck-dependent manufacturers are hurting.

Advertisement
Los Angeles Times Articles
|
|
|