The monthly sales reports released by the world's automakers Wednesday carried a double dose of bad news for the U.S.
Trouble in the housing market has spread to dealer showrooms, with worrying implications for the broader economy, and Detroit is no longer the carmaker of choice for the majority of Americans.
In July, import brands grabbed a majority share of the U.S. market for the first time as sales by the Big Three nosedived. Sales of foreign models were down too, off 5% from July 2006, but the falloff for General Motors Corp., Ford Motor Co. and Chrysler Group was much bigger -- 19%.
Total car and light truck sales in the U.S. fell 12.3%, according to data tracking firm AutoData Corp.
"Housing sales are in the tank, and now we're seeing the same in auto sales," said Erich Merkle, an analyst with the consulting firm IRN Inc. "What else is there? You can't support an economy on groceries and gasoline."
For Detroit, the foreigners' achievement -- their cars accounted for almost 52% of July sales -- was a long time coming, though the milestone might not be very meaningful in an industry that is increasingly globalized.
And the "import" tag fits less and less these days. For example, more than 80% of the 900,000 vehicles Honda Motor Co. has sold in the United States this year were made in the U.S. or Canada.
"All of the major manufacturers are operating across the globe now," said David Cole, director of the Center for Automotive Research in Ann Arbor, Mich. "While GM has lost market share in the United States, they've dramatically expanded their market share in other parts of the world."
Last month's sales drop was the biggest for U.S. carmakers since July 2006, when the decline was 17%, according to Santa Monica-based Edmunds.com. That month's results were competing with gangbuster sales in July 2005 that had been stimulated by "employee discount" financing offers. Sales fell almost 14% in October 2005 as gas prices spiked in the wake of hurricanes Katrina and Wilma.
There were only scattered pockets of good news last month. Among big automakers, only Nissan managed to post a gain, at 1.7%. Lexus, BMW, Land Rover and Audi also reported increases.
The slump in the housing market hurts car companies by putting a crimp in the sales of pickup trucks purchased by construction workers and companies, analyst Jesse Toprak of Edmunds.com said. Sales of the Ford F-Series and Chevy Silverado pickups, the two top-selling vehicles in America, fell 18% and 29%, respectively, last month.
