GM, Chrysler See June Sales Increases

DETROIT July 2, 2003; John Porretto writing for the AP reported that heavy consumer incentives failed to give Detroit's Big Three automakers the big sales lift they hoped for in June, and foreign competitors continued to strengthen their presence with fewer rebates and financing deals.

General Motors Corp. and DaimlerChrysler AG's Chrysler Group said Tuesday their sales grew in June, while Ford Motor Co.'s volume was off slightly.

At the same time, Nissan North America and Toyota Motor Sales USA both had double-digit sales gains compared with the year-ago period, and Mitsubishi Motors North America and American Honda Motor Co. weren't far behind.

"Steady sales from a fresh lineup of new products have helped us avoid massive incentive programs," said Jim Press, Toyota Motor Sales' executive vice president and chief operating officer.

Together, Detroit's Big Three saw their sales fall 4.1 percent in the first half of the year, while Asian automakers' U.S. sales rose 2.2 percent.

David Healy, an analyst with Burnham Securities Inc., said gains by the transplants should come as no surprise as they continue to add manufacturing capacity and new products throughout North America.

"They're invading parts of the car and truck markets the Big Three have had pretty much to themselves up to now," said Healy, citing the large pickup segment as an example.

June's seasonally adjusted annual sales rate was 16.4 million units -- in line with most predictions and up from May's 16.1 million selling pace.

The selling rate was about flat compared with June 2002, a downer for an industry that had hoped for a boost given unprecedented consumer incentives and the end of the war in Iraq.

Still, most automakers were somewhat upbeat when looking ahead to the rest of 2003.

"We see some encouraging signs that the economy may be on the upswing," said Dick Colliver, executive vice president of American Honda. "But the car market will remain a tough place to compete for some time to come."

GM, the world's largest automaker, saw its light truck sales rise 10 percent, while car sales, excluding its Saab brand, were down 9 percent compared with results recorded in June 2002.

GM set an industry record for truck sales for the third consecutive month with 247,577 deliveries, led by strong sport utility vehicle sales.

"Despite some economic uncertainty, industry sales levels for the first half of the year have been in line with our expectations," said John Smith, GM's group vice president for sales, service and marketing in North America.

"We remain optimistic the second half of the year will improve and this momentum will carry into 2004," Smith said.

Ford, the world's No. 2 automaker, saw its sales slip just more than 1 percent despite heavy incentives.

Sales of Ford, Lincoln and Mercury brands were off 1.1 percent. Car volume was down 8 percent, while light truck sales -- which include vans, pickups and SUVs -- rose 2.7 percent.

Jim O'Connor, Ford's group vice president for North American marketing, sales and service, said business was better in the second quarter than in the first, and he's optimistic about prospects for the remainder of the year.

Chrysler, the world's No. 5 automaker, received a lift from its new Pacifica minivan-sport utility vehicle hybrid. After a slow start in May, when sales totaled 2,471, Chrysler sold 6,642 Pacificas last month.

Chrysler, which has said it likely will post a loss of $1 billion in the second quarter because of fierce price competition in North America, is counting on the Pacifica for a bulk of its car sales.

Chrysler also sold more Ram pickups last month than in any previous June.

"The economic environment is trending upward," said Gary Dilts, the Chrysler Group's senior vice president for sales, citing low interest rates, improving stock market results and rising consumer confidence.

Among the Asians, sales were up 21.5 percent at Nissan, 10.9 percent at Toyota, 9.6 percent at Mitsubishi and 8.7 percent at Honda.

Toyota, Japan's No. 1 automaker, had its best-ever first-half sales performance in 46 years of business in the United States.

June results for Chrysler, Ford and GM generally were in line with analysts' estimates.