WALL STREET JOURNAL : Car Makers See End to Sales Slide

JULY 2, 2009

Car Makers See End to Sales Slide
By ANDREW GROSSMAN and KATE LINEBAUGH
The three biggest car makers in America called a bottom to the long decline in U.S. auto sales as the industry reported its smallest monthly sales drop this year.
New-vehicle sales in June fell 28% from a year earlier to 860,000 cars and light trucks, according to the market-research firm Autodata Corp. That would be the smallest decline in any month this year.
“We believe the industry is moving beyond the bottom,” said Bob Carter, group vice president of Toyota Motor Co. in the U.S. “The weak economy’s grip on the auto industry appears to be lessening.”
Car Sales Sink Again
See U.S. light-vehicle sales since 2005.
View Interactive
More interactive graphics and photos
Ford Motor Co. concurred. “The auto-industry downturn appears to be nearing a turning point,” George Pipas, the top sales analyst at Ford, said in a conference call.
Autodata said the annualized selling pace of cars and light trucks in the U.S. was 9.69 million vehicles, down from 9.91 million in May but still up from earlier in the year.
Even General Motors Corp. is calling a bottom. The company “feels pretty strongly that the bottom was hit earlier in the year,” said Mark LaNeve, GM’s sales and marketing chief, on a conference call.
The relatively stable auto-industry performance came as the U.S. Treasury Department and the Canadian government planned a coordinated approach toward selling their GM stake that could end their ownership role no later than 2018, according to people familiar with the matter.
The auto industry expects sales to get a boost at the end of July as consumers start to take advantage of the government’s “cash for clunkers” program, which provides incentives for consumers to trade in old cars for new models that get higher gas mileage.
Meanwhile, though, many car makers continued to post significant declines. GM said its sales fell 33% to 174,785 vehicles, Chrysler Group LLC’s declined 42% to 68,297 and even Toyota’s were down 32% at 131,654.
Ford, the only one of the Big Three Detroit auto makers that didn’t require government bailout loans and stayed out of bankruptcy-court proceedings, reported its sales declined just 11%, to 154,873 cars and trucks. That total allowed Ford to outsell Toyota for the fourth straight month.
Ford officials did stop short of predicting a full recovery, but they said the company believes the industry could see a modest improvement in the second half.
Emily Kolinski-Morris, a Ford senior economist, noted that the rate of decline in home prices is slowing and other economic indicators point to some strengthening in consumer confidence. Vehicle sales for the full year could well reach 10.5 million, she said. That’s still low, but it would represent an increase from the industry’s depressed selling rate in the 2008 fourth quarter and this year’s first quarter.
Meanwhile, a useful barometer of U.S. business showed continued improvement last month. An increase in production and a smaller decline in employment helped boost the Institute for Supply Management’s index of manufacturing activity to 44.8 in June from 42.8 in May, the sixth monthly increase in a row.
Associated Press
New-vehicle sales in June fell 28% from a year earlier to 860,000 cars and light trucks.
Toyota’s Mr. Carter said sales in California continued to be the “most challenged” in June, while other regions such as the Southeast, the East Coast and the upper Midwest had stronger sales. “We are starting to see some mild recovery on the light-truck side,” he added. “It feels like the industry is coming back to a 50-50 balance at least in the short term.”
In another positive development, auto makers are reporting tighter inventories, which help to boost prices and profit margins. Ford ended June with a 60-day supply of vehicles on hand, down 38% from a year ago. Toyota had a 40-day supply. GM’s supply was still higher than its competitors’ inventories at 90 days, but it has dropped 27% from a year ago.
“As those inventories come down, there is opportunity,” said Jim Farley, Ford’s marketing chief. “That’s typically what happens in a recovery.”
The sharp declines at GM and Chrysler were caused in part by significantly lower sales to fleet customers such as rental-car companies. GM’s fleet sales were down 49% and Chrysler’s 95%. Auto makers also said uncertainty about the government’s “cash for clunkers” trade-in incentive program had depressed sales at the end of the month.
But both GM and Chrysler were helped as hundreds of their dealers scrambled to clear their inventory before closing their franchises as part of the two companies’ restructuring plans. Chrysler is dropping 789 stores from its retail network. GM saw similar clearance efforts by dealers that represent its Pontiac, Saturn and Hummer brands.JULY 2, 2009
Car Makers See End to Sales Slide
By ANDREW GROSSMAN and KATE LINEBAUGH
The three biggest car makers in America called a bottom to the long decline in U.S. auto sales as the industry reported its smallest monthly sales drop this year.
New-vehicle sales in June fell 28% from a year earlier to 860,000 cars and light trucks, according to the market-research firm Autodata Corp. That would be the smallest decline in any month this year.
“We believe the industry is moving beyond the bottom,” said Bob Carter, group vice president of Toyota Motor Co. in the U.S. “The weak economy’s grip on the auto industry appears to be lessening.”
Car Sales Sink Again
See U.S. light-vehicle sales since 2005.
View Interactive
More interactive graphics and photos
Ford Motor Co. concurred. “The auto-industry downturn appears to be nearing a turning point,” George Pipas, the top sales analyst at Ford, said in a conference call.
Autodata said the annualized selling pace of cars and light trucks in the U.S. was 9.69 million vehicles, down from 9.91 million in May but still up from earlier in the year.
Even General Motors Corp. is calling a bottom. The company “feels pretty strongly that the bottom was hit earlier in the year,” said Mark LaNeve, GM’s sales and marketing chief, on a conference call.
The relatively stable auto-industry performance came as the U.S. Treasury Department and the Canadian government planned a coordinated approach toward selling their GM stake that could end their ownership role no later than 2018, according to people familiar with the matter.
The auto industry expects sales to get a boost at the end of July as consumers start to take advantage of the government’s “cash for clunkers” program, which provides incentives for consumers to trade in old cars for new models that get higher gas mileage.
Meanwhile, though, many car makers continued to post significant declines. GM said its sales fell 33% to 174,785 vehicles, Chrysler Group LLC’s declined 42% to 68,297 and even Toyota’s were down 32% at 131,654.
Ford, the only one of the Big Three Detroit auto makers that didn’t require government bailout loans and stayed out of bankruptcy-court proceedings, reported its sales declined just 11%, to 154,873 cars and trucks. That total allowed Ford to outsell Toyota for the fourth straight month.
Ford officials did stop short of predicting a full recovery, but they said the company believes the industry could see a modest improvement in the second half.
Emily Kolinski-Morris, a Ford senior economist, noted that the rate of decline in home prices is slowing and other economic indicators point to some strengthening in consumer confidence. Vehicle sales for the full year could well reach 10.5 million, she said. That’s still low, but it would represent an increase from the industry’s depressed selling rate in the 2008 fourth quarter and this year’s first quarter.
Meanwhile, a useful barometer of U.S. business showed continued improvement last month. An increase in production and a smaller decline in employment helped boost the Institute for Supply Management’s index of manufacturing activity to 44.8 in June from 42.8 in May, the sixth monthly increase in a row.
Associated Press
New-vehicle sales in June fell 28% from a year earlier to 860,000 cars and light trucks.
Toyota’s Mr. Carter said sales in California continued to be the “most challenged” in June, while other regions such as the Southeast, the East Coast and the upper Midwest had stronger sales. “We are starting to see some mild recovery on the light-truck side,” he added. “It feels like the industry is coming back to a 50-50 balance at least in the short term.”
In another positive development, auto makers are reporting tighter inventories, which help to boost prices and profit margins. Ford ended June with a 60-day supply of vehicles on hand, down 38% from a year ago. Toyota had a 40-day supply. GM’s supply was still higher than its competitors’ inventories at 90 days, but it has dropped 27% from a year ago.
“As those inventories come down, there is opportunity,” said Jim Farley, Ford’s marketing chief. “That’s typically what happens in a recovery.”
The sharp declines at GM and Chrysler were caused in part by significantly lower sales to fleet customers such as rental-car companies. GM’s fleet sales were down 49% and Chrysler’s 95%. Auto makers also said uncertainty about the government’s “cash for clunkers” trade-in incentive program had depressed sales at the end of the month.
But both GM and Chrysler were helped as hundreds of their dealers scrambled to clear their inventory before closing their franchises as part of the two companies’ restructuring plans. Chrysler is dropping 789 stores from its retail network. GM saw similar clearance efforts by dealers that represent its Pontiac, Saturn and Hummer brands.
NOTE: MORE GOOD NEWS. NOTICE HOW MANY MORE DEALERS ARE ADVERTISING AGAIN? ALSO, NOTICE HOW MANY HAVE INCREASED THEIR ADVERTISING TO GAIN THE LEADERSHIP POSITION? DEALERS THAT GET IN FRONT NOW COULD STAY THERE AS THE BUSINESS COMES BACK.=DP
JULY 2, 2009
Car Makers See End to Sales Slide
By ANDREW GROSSMAN and KATE LINEBAUGH
The three biggest car makers in America called a bottom to the long decline in U.S. auto sales as the industry reported its smallest monthly sales drop this year.
New-vehicle sales in June fell 28% from a year earlier to 860,000 cars and light trucks, according to the market-research firm Autodata Corp. That would be the smallest decline in any month this year.
“We believe the industry is moving beyond the bottom,” said Bob Carter, group vice president of Toyota Motor Co. in the U.S. “The weak economy’s grip on the auto industry appears to be lessening.”
Ford Motor Co. concurred. “The auto-industry downturn appears to be nearing a turning point,” George Pipas, the top sales analyst at Ford, said in a conference call.
Autodata said the annualized selling pace of cars and light trucks in the U.S. was 9.69 million vehicles, down from 9.91 million in May but still up from earlier in the year.
Even General Motors Corp. is calling a bottom. The company “feels pretty strongly that the bottom was hit earlier in the year,” said Mark LaNeve, GM’s sales and marketing chief, on a conference call.
The relatively stable auto-industry performance came as the U.S. Treasury Department and the Canadian government planned a coordinated approach toward selling their GM stake that could end their ownership role no later than 2018, according to people familiar with the matter.
The auto industry expects sales to get a boost at the end of July as consumers start to take advantage of the government’s “cash for clunkers” program, which provides incentives for consumers to trade in old cars for new models that get higher gas mileage.
Meanwhile, though, many car makers continued to post significant declines. GM said its sales fell 33% to 174,785 vehicles, Chrysler Group LLC’s declined 42% to 68,297 and even Toyota’s were down 32% at 131,654.
Ford, the only one of the Big Three Detroit auto makers that didn’t require government bailout loans and stayed out of bankruptcy-court proceedings, reported its sales declined just 11%, to 154,873 cars and trucks. That total allowed Ford to outsell Toyota for the fourth straight month.
Ford officials did stop short of predicting a full recovery, but they said the company believes the industry could see a modest improvement in the second half.
Emily Kolinski-Morris, a Ford senior economist, noted that the rate of decline in home prices is slowing and other economic indicators point to some strengthening in consumer confidence. Vehicle sales for the full year could well reach 10.5 million, she said. That’s still low, but it would represent an increase from the industry’s depressed selling rate in the 2008 fourth quarter and this year’s first quarter.
Meanwhile, a useful barometer of U.S. business showed continued improvement last month. An increase in production and a smaller decline in employment helped boost the Institute for Supply Management’s index of manufacturing activity to 44.8 in June from 42.8 in May, the sixth monthly increase in a row.
Associated Press
New-vehicle sales in June fell 28% from a year earlier to 860,000 cars and light trucks.
Toyota’s Mr. Carter said sales in California continued to be the “most challenged” in June, while other regions such as the Southeast, the East Coast and the upper Midwest had stronger sales. “We are starting to see some mild recovery on the light-truck side,” he added. “It feels like the industry is coming back to a 50-50 balance at least in the short term.”
In another positive development, auto makers are reporting tighter inventories, which help to boost prices and profit margins. Ford ended June with a 60-day supply of vehicles on hand, down 38% from a year ago. Toyota had a 40-day supply. GM’s supply was still higher than its competitors’ inventories at 90 days, but it has dropped 27% from a year ago.
“As those inventories come down, there is opportunity,” said Jim Farley, Ford’s marketing chief. “That’s typically what happens in a recovery.”
The sharp declines at GM and Chrysler were caused in part by significantly lower sales to fleet customers such as rental-car companies. GM’s fleet sales were down 49% and Chrysler’s 95%. Auto makers also said uncertainty about the government’s “cash for clunkers” trade-in incentive program had depressed sales at the end of the month.
But both GM and Chrysler were helped as hundreds of their dealers scrambled to clear their inventory before closing their franchises as part of the two companies’ restructuring plans. Chrysler is dropping 789 stores from its retail network. GM saw similar clearance efforts by dealers that represent its Pontiac, Saturn and Hummer brands.
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One response to “WALL STREET JOURNAL : Car Makers See End to Sales Slide

  1. Pingback: WALL STREET JOURNAL : Car Makers See End to Sales Slide | UK Web Designer

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