June sales at Ford sees smallest decline
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The Ford Motor Co. said its sales were down 11 percent from June 2008, the smallest decline any of the six largest automakers has reported since last summer. THE ASSOCIATED PRESS |
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By NICK BUNKLEY THE NEW YORK TIMES - Published: July 2, 2009
DETROIT — June sales figures released Wednesday showed another difficult month for automakers, yet provided a hint that demand for new vehicles in the United States might finally be on the upswing.
The Ford Motor Company said its sales were down 11 percent from June 2008, the smallest decline of any the six largest automakers has reported since last summer.
In contrast, sales fell 34 percent for General Motors, which has temporarily shut many of its factories to pare inventories, and 42 percent for Chrysler, which closed all of its United States plants while it operated in bankruptcy protection. The plant closings cut sharply into both companies' sales to car rental companies and other business customers.
May sales for GM were down 30 percent from a year ago while Chrysler's were down 47 percent.
"Customers are cautiously coming back into the market, although the industry remains very weak," Mark LaNeve, G.M.'s vice president for North American sales, service and marketing, said.
Toyota said its sales declined 32 percent. Nissan and Mercedes reported a 23 percent drop. Sales fell 20 percent at BMW and 18 percent at Volkswagen. Honda sales dropped 30 percent.
Ford said its sales in more than half of the country were about even with or greater than a year ago but that low demand in the West and Southeast continued to drag on the market.
"We're making steady progress and are firmly focused on our plan to build a sustainable and exciting Ford," James D. Farley, Ford's group vice president for marketing and communications, said. "We remain grounded, however, given challenging industry and economic conditions."
Ford said this week that it was increasing production in the third quarter, which starts Wednesday, to match the rise in demand its dealers were seeing. The company now plans to build 67,000 more vehicles, a 16 percent increase, than it did in the third quarter of 2008.
Over all, industry sales are expected to be down at least 25 percent compared with June 2008. Though dismal by any measure, it could be the first time since September that total sales fell by less than 30 percent on a year-over-year basis, a positive sign.
June could also be the first month this year in which new vehicles sold at an annualized rate of at least 10 million. For most of the last decade, auto sales in the United States were around 17 million a year before plummeting in 2008. Fewer than five million vehicles were sold in the first half of 2009, a decrease of nearly 37 percent.
But declining jobless claims and higher consumer confidence ratings "suggest to us that the worst is behind us," Ford's chief sales analyst, George Pipas, said this week. "We may have seen the low point in auto sales."
Automakers are hoping for a modest jump in demand beginning later this month, when the so-called cash for clunkers program begins. Eligibility requirements and financing limitations will prevent the program from stimulating the market as much as automakers had hoped, but they are eager for any increase in showroom traffic that it creates.
The Korean automaker Hyundai on Wednesday began a new promotion that lets buyers of some models buy gas for $1.49 a gallon for one year. The deal is similar to one that was successful for Chrysler last summer, when gas prices surged above $4 a gallon; Chrysler guaranteed buyers a price of $2.99 a gallon — which is higher than today's nationwide average of $2.63 — for up to three years.
Despite slow sales, inventories have been shrinking because automakers have cut their factory output significantly.
Chrysler, which shut down all of its assembly plants when it filed for bankruptcy protection two months ago, on Monday restarted seven plants. A smaller plant restarted in mid-June, and the rest are expected to reopen soon. Many G.M. plants have been down for much of the last few months.
Chrysler cut 789 of its dealerships, about a quarter of its outlets nationwide, in early June in a bid to make itself and its remaining dealerships more profitable. Many of the stores that were eliminated ran huge sales in their final days, increasing Chrysler's total for June.
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