Shackled by an absolutely horrific performance by General Motors, June sales of new cars and light trucks were the second-lowest in 10 years for that month. The rest of the U.S. industry did reasonably well, but GM's sales of domestic cars and trucks plunged 21.7 percent (87,911 units) from last year.
GM said that 13,487 units of that loss resulted from a "planned reduction" of sales to daily rental fleets. The other 74,424? No specific reasons.
The industry's dealers delivered 1,455,649 new cars and light trucks last month, down 3.0 percent from a year ago. Without GM's collapse, the industry would have been up nearly 4 percent for the month.
For the first half, sales totaled 8,248,420, down 1.5 percent from last year. The seasonally adjusted annual rate crumbled to 15.9 million, the first time this year it has been below 16 million.
Was June's disaster a harbinger of things to come for GM, or was it a one-month fluke? The industry will watch July sales closely to see whether the General is able to climb out of the pit.
Paul Ballew, GM's top sales analyst, said GM was outspent on incentives in June, especially by Toyota on the Tundra against the Chevrolet Silverado and GMC Sierra. He promised it won't happen again. Incentives for the Japanese Big 3 rose for the month.
June's catastrophe at GM was unexpected and inexplicable. For the first five months of this year, GM's domestic brand sales were down 3.1 percent. June pulled the deficit down to 6.8 percent, not good but not exactly a cause for hand-wringing.
The industry's performance in June engendered the usual questions. Here are some of them.
Who's on first?
Toyota Division was the divisional leader for the second month in a row, but it was close. Toyota topped Ford division by only 1,706 vehicles. Chevrolet was 19,290 behind Toyota.
But six-month sales raised an even more pressing question: Will a foreign car division become the best-selling brand in the United States for the full year?
For six months, Toyota Division was 23,979 units behind Chevrolet, but Toyota outsold Chevy in May and June. Toyota is even closer to Ford. At midyear, Ford division was only 7,049 sales ahead of Toyota.
Market shares tighten
In June, the Detroit 3's domestic makes had 50.2 percent of the car and light-truck market in this country, perilously close to the 50-50 split that is dreaded by everybody on the domestic side of the fence.
It was Detroit's lowest share in the history of the auto business in the United States. The previous depth was 50.5 percent in January of this year. A year ago, the Detroit 3 had 56.0 percent in June.
GM's domestic brands took just 21.7 percent in June, down a crushing 5.2 percentage points from a year ago. Ford Motor's domestics had 15.9 percent in June, a loss of 0.8 points. The Chrysler group sang "Hey, Look Me Over" as its domestic share rose to 12.6 percent from 12.4.
For the year to date, it was the same sad story - GM down 1.3 points; Ford Motor, down 1.7 points and the Chrysler group even.
But the month and the year to date were great for the Japanese Big 3. June brought sales gains of 22.7 percent for Nissan North America, 11.5 percent for American Honda Motor Co. and 10.2 percent for Toyota Motor Sales U.S.A. Market share for the three in June jumped 4.6 points to 32.9.
Hot models for the Japanese leaders in June were the Toyota Camry, Prius, Yaris, Tacoma and Tundra; the Honda Civic, Fit and CR-V; and the Nissan Altima.
For six months, sales rose 6.3 percent for the Japanese Big 3, and market share climbed 2.3 percentage points.
Whither GM?
General Motors is near the peak of its new-product cycle, and sales continue to slide. What does that mean for GM's future?
Models in GM's new-product cycle that are now on sale include the Chevrolet Impala, Silverado and Tahoe; the Pontiac G5, G6 and Solstice; the Buick LaCrosse and Lucerne; the GMC Sierra and Yukon; the Saturn Outlook, Sky and Aura, and the Hummer H3. The Buick Enclave and the GMC Acadia are too new to consider. The Cadillac CTS and the Chevy Malibu are still in the wings.
That's 14 relatively new or revamped nameplates. GM currently has 52 nameplates in its fleet. Some of the newcomers are doing pretty well; others, like the Buick cars, are in the tank.
In general, the new trucks are outperforming the new cars.
Wrangler riding high
Want an SUV success story for 2007?
Look no farther than the Jeep Wrangler. Sales were up 93.0 percent in June and 86.2 percent for six months. It's the best-selling Jeep with 65,651 for six months; last year at this time, it was dead last among the Jeep entries with 35,265.
Why the resurrection? The Wrangler is new for 2007, and it has added a four-door model. Amazing what a couple of extra doors can do.
Socko cars needed
In the first half of this year, cars accounted for 36.8 percent of the new vehicles sold by Detroit 3 dealers. Last year, cars had 38.8 percent. So Detroit 3 dealers are even more dependent on so-called light trucks.
In June, the Detroit 3's car share was 39.0 percent, the same as last year.
So have Detroit 3 dealers forgotten how to sell cars? Really, the blame lies with the manufacturers. The Detroit 3 apparently have forgotten how to make them. Detroit 3 dealers are woefully short of the cars people want to buy.
The Chrysler group decided to promote cars last month, and what happened? Its car sales were 30.4 higher than in the year-ago month. GM and Ford Motor continued to stress trucks. GM's domestic brand car sales dropped 19.3 percent; Ford's domestics went down 24.6 percent.
Compared with the Detroit 3's 36.8 percent cars, the imports as a whole made 63.7 percent of their first-half sales on the car side, about the same as 62.8 percent last year. In other words, the imports are selling lots of cars, and they're still giving the domestics fits on the truck side.
You may e-mail John K. Teahen Jr. at [email protected]
