GM, Ford, Toyota Buyers Shun Trucks: "There is something more going on here..."

[steinravnik]

GM, Ford, Toyota Sales Fell as Buyers Shun Trucks



Aug. 1 (Bloomberg) -- General Motors Corp., Ford Motor Co. and Toyota Motor Corp.'s July U.S. sales declined as record gasoline prices damped demand for trucks and a slowing economy kept consumers away from dealer lots.

Sales fell 27 percent from a year earlier, GM said today. Ford reported a 15 percent drop, while Toyota's fell 12 percent. Honda Motor Co. said it sold 1.6 percent fewer vehicles, and Nissan Motor Co. posted an 8.5 percent increase.

Ford, GM and Chrysler LLC, more dependent on trucks than Asia-based competitors such as Honda, have led the industry's eight-month sales slide. Automakers haven't been able to meet demand for smaller, fuel-efficient cars as $4-a-gallon gasoline and a 1.9 percent second-quarter economic growth rate pinched consumers.

``The numbers I've seen look pretty bad,'' George Magliano, an auto analyst for Global Insight Inc. in New York, said in an interview. ``There is something more going on here than just the economy. I think the high gas prices are changing consumers' mindset about buying cars and they are just staying away.''

The U.S. unemployment rate rose to the highest level in four years in July, the Labor Department said today. The second- quarter growth for the economy announced yesterday was less than the 2.3 percent median projection in a Bloomberg survey.

Chrysler Estimates

Chrysler's sales probably fell 27 percent, the average estimates of four analysts surveyed by Bloomberg. The figures are adjusted for 2 more selling days this month than in July 2007; unadjusted percentages would be about 8 points less severe.

July sales will match June's annual selling rate of 13.6 million cars and light trucks, according to a Bloomberg survey of 40 analysts and economists. That was the lowest level since 1993, when the industry was emerging from a recession. First-half U.S. sales tumbled 10 percent.

``We expect the second half of 2008 will be more challenging than the first half as economic and credit conditions worsen,'' Ford sales chief Jim Farley said in the statement today.

GM said in a statement that July sales fell to 235,184 from 320,935 a year earlier. The Detroit-based company's sales of light trucks, which include pickups, sport-utility vehicles and van, plunged 35 percent.

``Obviously, the weakness in the truck market persisted,'' said Mark LaNeve, GM's North American sales chief. The company today also reported a $15.5 billion second-quarter net loss.

Ford

Ford, based in Dearborn, Michigan, said it sold 161,530 cars and trucks in July, down from 189,920 a year earlier.

Ford's results included a 21 percent decline for F-Series pickups and a 52 percent slide for Explorer SUVs. The Focus small car gained 16 percent. The company has been operating a Wayne, Michigan, plant on overtime to boost supply of the cars.

Ford is shutting down F-150 plants in Dearborn and in Kansas City, Missouri, for most of the third quarter to pare dealer inventories of the large pickups, company sales analyst George Pipas said on a conference call.

Ford postponed introduction of a redesigned F-150 into the fourth quarter because of falling sales. The Dearborn plant will be shut all quarter while the Missouri factory will have limited output when it begins building the revamped F-150, Pipas said.

Toyota, Honda

Toyota, second in U.S. auto sales this year behind GM, said it sold 197,424 vehicles, a decline from 224,058. Sales of light trucks tumbled 27 percent, including a 42 percent drop for the Tundra large pickup, the Toyota City, Japan-based company said in a statement.

The company sold 8 percent fewer of its Prius gasoline- electric sedans, as it strains to meet demand for the fuel- efficient cars. The total decline adjusted for sales days was 19 percent, Toyota said.

Honda, the only major automaker to increase sales this year, said sales fell to 138,744 from 141,048 a year earlier because of a decline for its light trucks. The Tokyo-based company said its total adjusted for sales days dropped 9.2 percent.

Nissan, Japan's third-largest automaker and No. 6 in the U.S., sold 95,319 vehicles last month, spokesman Fred Standish said in an interview today. The increase adjusted for sales days was 0.1 percent, he said.

Sales rose 16 percent for Nissan's Sentra small cars and 14 percent for its Versa subcompacts. The automaker increased truck sales 18 percent, helped by the new Rogue crossover SUV and a 24 percent gain for its Frontier small pickup.

This year's 28 percent rise in the average gasoline price left automakers unprepared for the shift in demand to cars, analysts have said. Last month, Ford said a short supply of the Focus hurt its sales for June.

While unsold trucks pile up on dealer lots, the industry had a 44-day supply of cars on July 1, below the 60 days that analysts consider typical, according to Automotive News magazine.

http://www.bloomberg.com/apps/news?p...d=aZcVNzn61d0s

[Baz]

That is the ugliest Truck i have ever seen. Ever.

As for Trucks sales slowing, is anyone really surprised?.

[63GrandSport001]

I remember that during the start of the year GM was saying that the economy was going to turn around mid year even though much of the economists were saying that things are going to be worse then what the public was being let on to............

It seems like GM just said those things just to keep its stock up for as long as it could.

[HoosierRon]

Once again, my theory is proven correct: it is impossible for a "journalist" to write an article about Toyota and not mention the Prius. This is a story about declining truck sales, yet they cannot resist. Where is the comment about Malibu retail sales up 94%?

[Ming]

That photo of the Tundra illustrates how ridiculous it is that just a couple of years ago these vehicles were being pushed as a great way to commute to work at a desk job. Yes, a Toyota salesman I know told me just that: "let me get you into a Tundra", knowing that the occasional tow of a small trailer I have does everything I'd need from a big truck, and I work a desk job. I'm sure that here in Texas he got his fair share of people who would have been fine in a Tacoma or even a Camry into a V8 Tundra. He was good at playing along with the Big Rig (and way over-sticker Prius) Affluenza of a few years back to the tune of some nice profits. Not sure how he's doing recently...

All of the guys at work I know who were oohing and aaahing at these trucks have now gone looking for smaller alternatives, and are now, finally, starting to talk about how cool some of the smaller options really are, tossing the "bigger is always better" mentality into the dust bin of historical FADS.

[kodos78]

It's amazing how many people thought those Tundras are cool. They are one of the ugliest trucks I've ever seen. And it looks MASSIVE in real life. It's cartoonish, and not in a good way like a Viper or original Dodge Ram.

I ALWAYS see them accelerating around me like they're running late to meet the Pope. Even in the era of $4/gallon gasoline.

[Rocket 88]

Originally Posted by Ming

That photo of the Tundra illustrates how ridiculous it is that just a couple of years ago these vehicles were being pushed as a great way to commute to work at a desk job.

What do you mean a few years ago? Didn't GM's marketing chief just point out that it would cost an extra $17 a week to commute in a Silverado?!

I just want to hear from GM that they finally clearly get that people want Fuel Efficient Vehicles. That everyone does not want to drive a Pick-up/Tahoe etc. That hi tech 4 cylinders with Direct Injection and Turbos are the way to go over "high value" engines which are not competetive and ruin GM's image.

PLEASE DEAR LORD, COULD THEY JUST SAY IT ONCE???? Oh, and if they say it could they actually mean it and not use it as a P.R. stunt? Oh, and if they build it, could they actually try and sell it and not just "steer" us to stuff we don't want?

Dear GM,

We are ready for smaller engines and smaller vehicles.

Totally Serious.

-The US consumer.

[windvale]

Originally Posted by Rocket 88

What do you mean a few years ago? Didn't GM's marketing chief just point out that it would cost an extra $17 a week to commute in a Silverado?!

I just want to hear from GM that they finally clearly get that people want Fuel Efficient Vehicles. That everyone does not want to drive a Pick-up/Tahoe etc. That hi tech 4 cylinders with Direct Injection and Turbos are the way to go over "high value" engines which are not competetive and ruin GM's image.

PLEASE DEAR LORD, COULD THEY JUST SAY IT ONCE???? Oh, and if they say it could they actually mean it and not use it as a P.R. stunt? Oh, and if they build it, could they actually try and sell it and not just "steer" us to stuff we don't want?

Dear GM,

We are ready for smaller engines and smaller vehicles.

Totally Serious.

-The US consumer.

Agree 100%

[steinravnik]

Originally Posted by Ming

That photo of the Tundra illustrates how ridiculous it is that just a couple of years ago these vehicles were being pushed as a great way to commute to work at a desk job. Yes, a Toyota salesman I know told me just that: "let me get you into a Tundra", knowing that the occasional tow of a small trailer I have does everything I'd need from a big truck, and I work a desk job. I'm sure that here in Texas he got his fair share of people who would have been fine in a Tacoma or even a Camry into a V8 Tundra. He was good at playing along with the Big Rig (and way over-sticker Prius) Affluenza of a few years back to the tune of some nice profits. Not sure how he's doing recently...

All of the guys at work I know who were oohing and aaahing at these trucks have now gone looking for smaller alternatives, and are now, finally, starting to talk about how cool some of the smaller options really are, tossing the "bigger is always better" mentality into the dust bin of historical FADS.

Living in the heart of DC, I don't see too many pickup trucks. I've driven I-20 across Texas, though, and I remember almost every other vehicle being some big pickup truck. And I mean big trucks, F-250's and 350's, duallys, with ridiculous light racks and steer horns on the hoods. All of them looked like they were never put to any real work.

[ScottS]

Originally Posted by steinravnik

``The numbers I've seen look pretty bad,'' George Magliano, an auto analyst for Global Insight Inc. in New York, said in an interview. ``There is something more going on here than just the economy. I think the high gas prices are changing consumers' mindset about buying cars and they are just staying away.''

Oooo... tell us more oh wise and all-knowing one.

This guy's sharp as a tack.

[Ming]

Originally Posted by steinravnik

Living in the heart of DC, I don't see too many pickup trucks. I've driven I-20 across Texas, though, and I remember almost every other vehicle being some big pickup truck. And I mean big trucks, F-250's and 350's, duallys, with steer horns on the hoods. All of them looked like they were never put to any real work.

LOL, well I can't remember the last time I saw any real horns on the front of a pickup, but I might just not notice anymore.

A lot of the trucks around here nowadays are very frou-frou with the fancy paint-to-match tonneau covers that rarely ever get used for more than opening them up slightly to throw some groceries into (like a trunk, ahem). Maybe to toss a few cases of Natty Light, Lone Star, or Busch into.

Then again, a lot of people have large yards when you get out far enough, to the country area where I live far NW of Houston, and unlike the Houston Suburbanite wanna-be tough guys with their Princess Pickups, people around here actually USE their trucks for what they were designed for.

[CJ Thunder]

Has anyone thought that cars have now become reliable enough people feel less inclined to replace them every X amount of years, huh?

So there are a couple people rushing to Cobalts and Priuses, that is a very long term investment to save money. Lots of other car sales have declined.

[BuickBoy]

The whole truck/SUV craze in many ways was a house of cards and the first $4 gallon gas brought it all down. While there are many who truely need a large truck and the market will always be there, you really don't need that much mass to run down to the 7/11 for a gallon of milk or go to work. This may be coming out of left field but for every day hauling a car based truck similar to crossovers would meet most family's needs. In other words GM and Ford had it right with the El Camino and Ranchero! But those products are no longer around or on anyone's radar. Once again stuck with declining sales and no product line that fits the bill. Most no longer even pay attention to GM's offerings. The Malibu is ever bit as good - specification wise - as an Accord (and looks better IMHO) but both of my neighbors just bought Accords without even considering the Malibu or any other GM offering.

Sad

[psece]

Terribly written article.

I have a 2003 Minivan and a 2005 4 cylinder Malibu as a commuter. They are both paid off. Why would I buy a car at this point, let alone a truck? I think there are a lot more people like me.

People need to stop concentrating on trucks as an issue and see that the entire market is down. What does GM need to do if all segments are down and not about to come back anytime soon?

[Kheiron]

^^^and thats the perception battle that GM is fighting unfortunately. It will continue to take them a few more product cycles of continuous improvement and becoming the leader (Cruze and VOLT are a good start) at delivering the highest performing and fuel efficient vehicles.

When I think of Honda, I think Fuel Efficient good handling reliable quality vehicles (even if they do look less appealing)...GM needs to gardener that image with Chevrolet, Saturn, Cadillac, and Pontiac. SAAB has the image, but they're a relative unknown brand outside of the North East and Michigan. IMHO