Filed under: Bad news, Products and services, Consumer experience, Competitive strategy, Ford Motor (F), General Motors (GM), Toyota Motor Corp. (TM), Oil
It probably should come as no surprise, but June was a tough month for automakers, and all signs are pointing to more troubles out on the horizon.
All but one major automaker saw their sales drop last month, with Honda Motor (NYSE: HMC) being the sole exception. For the month, Honda actually had a 1% year-over-year sales growth, which given the current market place was an exceptional feat.
So just how bad was June for the automakers? Pretty bad. During the month, combined auto sales fell to 1.19 million automobiles sold, a 266,000 decline from the same period last year. This just continues the trend that we have been seeing all year, amounting to roughly a 10% sales decline during the first half of the year.
Consumers are definitely reacting to the record high gasoline prices, moving as far away from SUVs as possible. In the wake of the shift, the major automakers found that they were unable to keep up with demand for the smaller, more fuel efficient vehicles. Typically you would think Japanese automaker Toyota (NYSE: TM) would have flourished under these circumstances, but it too suffered sales declines, mainly a result of not being able to keep up with demand for their its vehicles, in particular its fuel-efficient Prius, Corolla and Yaris automobiles.
General Motors (NYSE: GM) was able to put up superior total sales than Toyota, by selling 262,000 during the month, edging out its Japanese rival by about 69,000 automobiles. But this was mainly accomplished by offering last minute no-interest financing to bring buyers onto its lots. GM was able to keep the #1 slot for for the month, which does not cancel out the fact that it had a 21% drop in its vehicle sales and a 16% decline in its truck sales.
America’s other major automaker, Ford Motor (NYSE: F) also felt the pain last month. During the month, Ford’s sales shrunk by a mind-boggling 28%. The company is scrambling to shift its focus away from its heavy-duty trucks and SUVs, but the transition is just not coming fast enough. Ford, as well as GM — which have both announced that new, smaller automobiles are in the pipeline — will continue to face pressure since in both companies’ case the new subcompacts are not expected to roll off the production floor for at least another couple of years.
So yet another disappointing month for auto sales, and with gasoline prices continuing to remain at record levels, most analysts concur that the hard times are here to stay, at least for a while.
Michael Fowlkes has worked as a stock trader for seven years and spent the last four years working as an analyst for the on the internet investment advisory service Investor’s Observer.
Entries (RSS)