US carmakers to see dramatic decline in July sales

doh · 07-31-2006, 04:29 PM

http://yahoo.reuters.com/news/articl...mktNews&rpc=44

DETROIT, July 31 (Reuters) - U.S. automakers will likely post sharp declines in vehicle sales in July as they face incentive-boosted numbers from last year when a price war among Detroit's Big Three carmakers drove sales to record highs, analysts said.

By sharp contrast, Asian carmakers are expected to see another good month as high gasoline prices prompted many consumers to buy more fuel-efficient vehicles, particularly cars and compact SUVs, an area where Toyota Motor Corp. and Honda Motor Co. Ltd are strong, analysts said.

New vehicle sales in the United States for July are expected to come in at a seasonally adjusted annual rate of between 17 million and 17.2 million vehicles, according to analysts.

That would be down from last July's 20.7 million unit rate but higher than the 16.2 million rate posted in June.

Automakers will release their July sales results Tuesday, the first reading on consumer demand for cars and trucks in the second half of the year.

Overall U.S. auto sales slipped 2.4 percent in the first half and many analysts expect full-results to reflect a decline from the 16.94 million units sold in 2005.

"A tired consumer, geopolitical instability, rising gas prices, and rising rates would all point to weak U.S. auto demand," Merrill Lynch analyst John Murphy said of the negative factors surrounding July sales numbers.

But Murphy said that in spite of those potential problems, he expected a relatively healthy pace of auto sales to show that the American consumer remained surprisingly resilient

July sales results will be a key indicator of the success U.S. automakers have had in their efforts to reduce swollen inventories of unsold vehicles through incentives.

The rebates on offer in July were far less aggressive than last July when U.S. automakers offered all customers the chance to buy vehicle at a price their employees pay.

"There is certainly the excess supply in the domestic side," Michael Maroone, president and chief operating officer of AutoNation Inc. the largest auto retailer, told reporters and analysts last week. "The only incentive program that's really moved the customer was the short-term GM incentive."

Both General Motors Corp. and Ford Motor Co. which continue to lose money in North America, have cut third-quarter production by about 8 percent to bring inventories in line with demand.

GM, which started last summer's price-war, has steered clear of a repeat of the same kind of heavy rebates that boosted sales volumes but cut into profits for both the automaker and its dealer affiliates.

GM offered some discounts and limited low-finance offers in the second half of the month. In the first week of July, it offered zero-percent financing for up to six years on most of its models.

Ford has been offering interest-free loans for five years on most models along with cash discounts.

DaimlerChrysler's Chrysler Group has been the most willing to discount in recent months in order to clear out unsold inventory. In July, the automaker offered an employee-discount promotion along with interest-free loans and a return-back guarantee on most of its 2006 models.

"Both Ford and Chrysler were extremely aggressive with incentives although GM showed restraint this July," said Calyon Securities analyst Joseph Amaturo. "That said, we expect incentive activity to ratchet up as we progress through second half of (2006)."

Most analysts expected GM's sales to be down between 15 and 20 percent in July, while Ford sales were forecast to slip as much as 30 percent. Sales of Chrysler Group were expected to post a decline as much as 20 percent in year-on-year termns.

Meanwhile, sales of pickup truck and sport utility vehicles continued to slow in July, which is a key concern for GM, Ford and Chrysler.

The three companies are heavily dependent on the large vehicles for most of their sales and have already seen the trend hit their profit margins.

"The combination of lower SUV volumes, pressure on pickups and a higher mix of small cars is likely to pressure (financial) results," Goldman Sachs analyst Robert Barry said.

On the other hand, some of the fuel-efficient sedans from Japanese automakers have proven to be very popular.

"The Camry, certainly the Scion and the Prius are hot,"

SobeSVT · 07-31-2006, 04:32 PM

This is going to be so ugly . . .

Quickening · 07-31-2006, 04:36 PM

Blah blah blah..same story different month.

Tiger · 07-31-2006, 06:01 PM

What a joke of a rehash article.

Pure fluff. The Prius is hot? I thought sales were down significantly much of this year?

Anyhoo...WAY too simple of an article.

Proetus · 07-31-2006, 06:28 PM

Quote:

Originally Posted by Tiger

The Prius is hot? I thought sales were down significantly much of this year?

Production was decreased as they allocated more hybrid compnents to the Camry, but it is still selling for $2000 over sticker. In May the Prius only had a 2-day supply in the US.

http://www.usatoday.com/money/autos/...age-usat_x.htm

cfch3399 · 08-01-2006, 04:28 AM

How about waiting for them numbers to come in in the next couple of days and then worry about what some nobody analyist has to say.

drew770 · 08-01-2006, 05:51 AM

This is more evidence that GM needs to get more hybrid production in gear!!
We are in hurricane season, the middle east is in crisis mode and the over all American economy is slowing.
GM should be shoving the new Aveo and the hybrid Vue down our throats to let folks know that they don't have to go to Toyota and Honda for fuel efficient cars.
Its going to be a long hot summer for GM and Ford!

ByTheLake · 08-01-2006, 07:24 AM

No real surprise, given last summer's employee deals. Hardly makes much sense to compare the two Julys.

I'm more concerned about year-to-year comparisons and longer-term trends. That's a better indicator of a manufacturer's health and progress.

tgagneguam · 08-01-2006, 08:52 AM

Quote:

Originally Posted by Tiger

...The Prius is hot? I thought sales were down significantly much of this year?...

Come on, Tiger, you expect a journalist to make a data-supported statement? That's too much work.

You're right, though:

Prius:
June 2006: 9,696 (0.8)
June 2005: 9,622

YTD 2006: 48,156 (-9.7)
YTD 2005: 53,308

asim · 08-01-2006, 10:03 AM

Quote:

Originally Posted by Quickening

Blah blah blah..same story different month.

LOL...whats new today?

D C · 08-01-2006, 10:09 AM

Quote:

Originally Posted by cfch3399

How about waiting for them numbers to come in in the next couple of days and then worry about what some nobody analyist has to say.

I can tell you don't work in the media. If you do, you'll never make it without an infusion of alarmist attitude! lol

Sales are going to be down!!!
Ok, compared to what? Compared to last year when July sales set records? Well yeah
Ok, so what? Sales last July were at all-time record levels.
So does anyone expect that we'll have record-level sales EVERY July now? Well no.
So what's the point of the article then other than to be alarmist and anti-US automaker? Ummmm....

LAMRONH · 08-01-2006, 10:14 AM

Quote:

Originally Posted by D C

I can tell you don't work in the media. If you do, you'll never make it without an infusion of alarmist attitude! lol

Sales are going to be down!!!
Ok, compared to what? Compared to last year when July sales set records? Well yeah
Ok, so what? Sales last July were at all-time record levels.
So does anyone expect that we'll have record-level sales EVERY July now? Well no.
So what's the point of the article then other than to be alarmist and anti-US automaker? Ummmm....

Yep, you got it. Any way to put a negative spin on US makers.
If Toyota: "Unprecedented 2005 Sales Success May Not Be Repeated! Toyota Optimistic Anyhoo!"

Havasavana · 08-01-2006, 10:16 AM

Quote:

Originally Posted by SobeSVT

This is going to be so ugly . . .

I think you are right.

LAMRONH · 08-01-2006, 10:17 AM

Quote:

Originally Posted by ByTheLake

No real surprise, given last summer's employee deals. Hardly makes much sense to compare the two Julys.

I'm more concerned about year-to-year comparisons and longer-term trends. That's a better indicator of a manufacturer's health and progress.

There you go again, insisting on significant facts rather than emotion-laden hype spinning at 9000 RPM.
You will never work for the NYT with this attitude.

andy82471 · 08-01-2006, 10:47 AM

Does the media really need to harp on the obvious ?? We all know sales will be lower compare to last July. A more valid comparison would be to compare sales figure to July 2004 and most importantly how much money they made. It is always better to make more money by selling less vehicles than the other way around.

07-31-2006, 04:29 PM	#1 (permalink)
doh 6.0 Liter LS2 V8 Join Date: Sep 2003 Location: N.W.Ontario Posts: 4,770	US carmakers to see dramatic decline in July sales http://yahoo.reuters.com/news/articl...mktNews&rpc=44 DETROIT, July 31 (Reuters) - U.S. automakers will likely post sharp declines in vehicle sales in July as they face incentive-boosted numbers from last year when a price war among Detroit's Big Three carmakers drove sales to record highs, analysts said. By sharp contrast, Asian carmakers are expected to see another good month as high gasoline prices prompted many consumers to buy more fuel-efficient vehicles, particularly cars and compact SUVs, an area where Toyota Motor Corp. and Honda Motor Co. Ltd are strong, analysts said. New vehicle sales in the United States for July are expected to come in at a seasonally adjusted annual rate of between 17 million and 17.2 million vehicles, according to analysts. That would be down from last July's 20.7 million unit rate but higher than the 16.2 million rate posted in June. Automakers will release their July sales results Tuesday, the first reading on consumer demand for cars and trucks in the second half of the year. Overall U.S. auto sales slipped 2.4 percent in the first half and many analysts expect full-results to reflect a decline from the 16.94 million units sold in 2005. "A tired consumer, geopolitical instability, rising gas prices, and rising rates would all point to weak U.S. auto demand," Merrill Lynch analyst John Murphy said of the negative factors surrounding July sales numbers. But Murphy said that in spite of those potential problems, he expected a relatively healthy pace of auto sales to show that the American consumer remained surprisingly resilient July sales results will be a key indicator of the success U.S. automakers have had in their efforts to reduce swollen inventories of unsold vehicles through incentives. The rebates on offer in July were far less aggressive than last July when U.S. automakers offered all customers the chance to buy vehicle at a price their employees pay. "There is certainly the excess supply in the domestic side," Michael Maroone, president and chief operating officer of AutoNation Inc. the largest auto retailer, told reporters and analysts last week. "The only incentive program that's really moved the customer was the short-term GM incentive." Both General Motors Corp. and Ford Motor Co. which continue to lose money in North America, have cut third-quarter production by about 8 percent to bring inventories in line with demand. GM, which started last summer's price-war, has steered clear of a repeat of the same kind of heavy rebates that boosted sales volumes but cut into profits for both the automaker and its dealer affiliates. GM offered some discounts and limited low-finance offers in the second half of the month. In the first week of July, it offered zero-percent financing for up to six years on most of its models. Ford has been offering interest-free loans for five years on most models along with cash discounts. DaimlerChrysler's Chrysler Group has been the most willing to discount in recent months in order to clear out unsold inventory. In July, the automaker offered an employee-discount promotion along with interest-free loans and a return-back guarantee on most of its 2006 models. "Both Ford and Chrysler were extremely aggressive with incentives although GM showed restraint this July," said Calyon Securities analyst Joseph Amaturo. "That said, we expect incentive activity to ratchet up as we progress through second half of (2006)." Most analysts expected GM's sales to be down between 15 and 20 percent in July, while Ford sales were forecast to slip as much as 30 percent. Sales of Chrysler Group were expected to post a decline as much as 20 percent in year-on-year termns. Meanwhile, sales of pickup truck and sport utility vehicles continued to slow in July, which is a key concern for GM, Ford and Chrysler. The three companies are heavily dependent on the large vehicles for most of their sales and have already seen the trend hit their profit margins. "The combination of lower SUV volumes, pressure on pickups and a higher mix of small cars is likely to pressure (financial) results," Goldman Sachs analyst Robert Barry said. On the other hand, some of the fuel-efficient sedans from Japanese automakers have proven to be very popular. "The Camry, certainly the Scion and the Prius are hot,"

07-31-2006, 04:32 PM	#2 (permalink)
SobeSVT Banned Join Date: Jan 2005 Location: SoFla Drives: 05 Mariner Premier, 98 SLK 230. Both Mercs ;) Posts: 5,673	Re: US carmakers to see dramatic decline in July sales This is going to be so ugly . . .

07-31-2006, 04:36 PM	#3 (permalink)
Quickening 7.0 Liter LS7 V8 Join Date: Oct 2005 Location: San Antonio, Texas Drives: 2004 Saab 9-3 Aero Posts: 5,142	Re: US carmakers to see dramatic decline in July sales Blah blah blah..same story different month. __________________ 2004 Saab 9-3 Aero

07-31-2006, 06:01 PM	#4 (permalink)
Tiger 5.3 Liter Vortec V8 Join Date: Apr 2004 Location: Denver, CO USA Drives: Sold the 04 Avalanche! Posts: 1,425	Re: US carmakers to see dramatic decline in July sales What a joke of a rehash article. Pure fluff. The Prius is hot? I thought sales were down significantly much of this year? Anyhoo...WAY too simple of an article. __________________ "Eli got lucky..." - CobaltSSCrazy on 2/4/2008

08-01-2006, 04:28 AM	#6 (permalink)
cfch3399 6.0 Liter Vortec V8 Join Date: Jul 2004 Posts: 1,619	Re: US carmakers to see dramatic decline in July sales How about waiting for them numbers to come in in the next couple of days and then worry about what some nobody analyist has to say.

Remove Advertisements Sponsored Links
GM Inside News Forum Advertisement

08-01-2006, 05:51 AM	#7 (permalink)
drew770 3.6 Liter V6 Join Date: Mar 2005 Location: Central Florida Drives: 2004 Chevy Trailblazer 2002 Acura TL 3.2 2006 N Posts: 1,032	Re: US carmakers to see dramatic decline in July sales This is more evidence that GM needs to get more hybrid production in gear!! We are in hurricane season, the middle east is in crisis mode and the over all American economy is slowing. GM should be shoving the new Aveo and the hybrid Vue down our throats to let folks know that they don't have to go to Toyota and Honda for fuel efficient cars. Its going to be a long hot summer for GM and Ford! __________________ Don't forget CRACK IS WHACK!!!

08-01-2006, 07:24 AM	#8 (permalink)
ByTheLake 6.2 Liter Vortec V8 Join Date: Jun 2004 Location: Traverse City, MI Drives: '04 Corvette, '08 CTS Posts: 2,699	Re: US carmakers to see dramatic decline in July sales No real surprise, given last summer's employee deals. Hardly makes much sense to compare the two Julys. I'm more concerned about year-to-year comparisons and longer-term trends. That's a better indicator of a manufacturer's health and progress.

08-01-2006, 10:47 AM	#15 (permalink)
andy82471 3.8 Liter V6 Join Date: Jun 2005 Posts: 330	Re: US carmakers to see dramatic decline in July sales Does the media really need to harp on the obvious ?? We all know sales will be lower compare to last July. A more valid comparison would be to compare sales figure to July 2004 and most importantly how much money they made. It is always better to make more money by selling less vehicles than the other way around.

Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)

Thread Tools
Show Printable Version Email this Page
Display Modes
Linear Mode Switch to Hybrid Mode Switch to Threaded Mode