Sales of New Cars and Trucks Rebound in July, Even As GM, Ford Report Weaker Results

DETROIT August 4, 2004; John Porretto writing for the AP reported that the auto industry saw U.S. sales recover last month after a disappointing June, with DaimlerChrysler AG's Chrysler Group and Japanese brands the biggest winners.

But the nation's two largest automakers, General Motors Corp. and Ford Motor Co., both reported weaker year-over-year results.

No. 1 GM, which suffered a double-digit sales drop in June, posted its best sales month of the year, in part thanks to aggressive but costly incentives. Ford also had a solid month for retail sales, but its overall results came in below year-ago results for the fifth time this year.

Of the traditional Big Three U.S. automakers, Chrysler had the best month. Its business was up 2.35 percent on a 22 percent surge in car sales. Chrysler has posted a year-over-year sales increase in nine of the past 10 months.

Chrysler's sales have been buoyed by the new Chrysler 300, an unusual sedan that's become a favorite among baby boomers and rap stars alike. The automaker sold 12,915 300s in July, up from 11,300 in June.

"It's attracting customers across all demographic segments," said Gary Dilts, Chrysler's senior vice president for sales. "You can't buy this kind of popularity and appeal."

Nissan's U.S. arm recorded its best month ever, and Toyota's American division had its best-ever July.

Overall, the U.S. industry bounced back nicely from June, even though total sales were down slightly less than 1 percent from a strong, incentives-driven month a year ago. Percentages are adjusted and based on the daily sales rate; there were 27 selling days last month and 26 in July 2003.

The seasonally adjusted annual sales rate for July was 17.3 million units, well above June's 15.4 million pace but below May's rate of 17.8 million.

"The industry is reaping the benefits of the highest consumer confidence ratings in two years," said Jim Press, executive vice president of Toyota Motor Sales USA Inc. "Fuel prices are holding steady, the job market continues to improve and 2005 models are hitting showrooms. Those factors bode well for a strong third-quarter."

GM's car sales fell 4 percent last month, while truck sales declined 3 percent. The result was a sales total down 3.4 percent from an exceptionally strong month a year ago. The company's GMC brand posted record sales for July.

GM sold 451,505 vehicles in the month, the most for any month this year.

"We had solid growth in both sales volume and share, led by record utility sales," said John Smith, GM's group vice president for North American sales, service and marketing.

GM will launch several new cars in the coming months, including the Pontiac G6, Buick LaCrosse, Cadillac STS and Chevrolet Cobalt.

Nissan's July results rose 31 percent, helped by steadily increasing sales of its full-size Titan pickup. Nissan sold 8,726 Titans in July, 1,120 more than June, giving it an annualized sales rate of more than 100,000 units.

Overall, Nissan's truck sales were up 69 percent while car sales climbed 10 percent.

"Industry incentives are at all-time highs and it appears buyers know this," said Jed Connelly, Nissan North America's senior vice president for sales and marketing. "This had a role in July sales and it should continue in August."

Toyota said total sales were up 13.6 percent from a year ago, led by strong car demand. Sales of the Camry, the top-selling car in the United States, were up 9.4 percent. Toyota also sold 5,230 Prius gas-electric hybrid sedans, compared with 657 last July.

Ford said sales of its Ford, Lincoln and Mercury brands were off 7.5 percent last month, dragged down by car business that was off 20.6 percent. Truck sales, despite strong demand for the popular F-150 pickup, were off 1.5 percent.

Ford, the nation's second-biggest automaker, is experiencing a lull in car sales as it prepares for the launch of new models such as the Ford Five-Hundred sedan and redesigned Mustang later this year.

Ford has dubbed 2004 the "year of the car," but its trucks and sport utility vehicles have carried the load so far this year. Sales of F-Series trucks, the nation's best-selling vehicles, rose for the 11th consecutive month in July, coinciding with the introduction of the new F-150 model in September.

"Car sales have been weak, but help is on the way," said Jim O'Connor, Ford's group vice president for North American marketing, sales and service.

Ford's current consumer incentive offerings, announced last month, are good through Sept. 30.

Even before it announced July results, GM said Tuesday it was broadening its latest incentive program, including most 2005 cars and trucks with a cash rebate of $1,000.

The automaker reduced the basic cash rebate on most 2004 cars by $500 to $3,500 and on most 2004 trucks and sport utility vehicles by $500 to $4,500, said spokeswoman Deborah Silverman. But customers who finance through GM's finance arm, General Motors Acceptance Corp., could qualify for "bonus cash" of between $500 and $1,500.

The bonus cash offer varies by model and region of the country, Silverman said. The new program runs through Sept. 7.

Ford Motor Co.: http://www.ford.com

General Motors Corp.: http://www.gm.com

Chrysler: http://www.chrysler.com