Declining Sales Rock Auto Industry

Dismal Figures Are On Pace To Be The Lowest In 15 Years; Companies Blame High Gas Prices

(CBS/ AP)  General Motors Corp. soundly beat Toyota Motor Corp. in June to retain its traditional U.S. sales lead, but GM sales still dropped 18.2 percent during a dismal month for most large automakers.

Toyota's U.S. sales fell 21.4 percent, while Ford Motor Co. said it sales tumbled nearly 28 percent.

Annual auto sales, which hit 17 million in 2005, slowed to 16.1 million last year, and are expected to skid another 10% this year, reports CBS News Business Correspondent Anthony Mason

"We haven't seen a double digit decline in the automotive industry in decades," said auto industry analyst Rebecca Lindland with Global Insight.

Officially, U.S. auto sales are on pace for their worst year since 1993, with an estimated 14.5 million units in 2008 expected to be sold, down from an average of 16.8, reports CBS News correspondent Jeff Glor.

Ford was the first automaker to report sales data Tuesday. Analysts had predicted June auto sales could drop by double-digits to their lowest monthly rate in 16 years. Ford shares sank to a new 52-week low, while rival General Motors Corp. shares are trading near their lowest level in more than a half century.

GM's shares bounced nearly 6 percent higher in afternoon trading Tuesday after sinking to their lowest level in more than a half century during Monday's session.

The nation's biggest automaker on Tuesday reported selling 262,329 vehicles for the month, compared with Toyota's 193,234. Some industry analysts had expected Toyota to beat GM in the U.S. for the first time, but both companies were hurt by a sluggish economy and poor sales of trucks and sport utility vehicles.

Toyota car sales fell 9.4 percent in June while its truck sales were off 38.8 percent.

GM's car sales sank 21 percent in June, while its incentive-boosted truck sales were off 16 percent.

For the first half of the year, GM sales fell 16.3 percent compared with the year-ago period. Toyota sales were down 6.8 percent for the first six months of the year.

Toyota took the global sales lead from General Motors in the first quarter, capitalizing on growth in China and Europe as GM saw its North American sales drag down gains in other markets. GM barely won the global sales race with Toyota last year, but Toyota overtook it as the world's top automaker as measured by global vehicle production in 2007.


Honda Motor Co., with its car-heavy lineup, reported a 1.1 percent sales increase for June, with a 19.3 percent rise in car sales offsetting an 24 percent drop in trucks.

But Ford, still reliant on trucks and sport utility vehicles, saw its sales drop 27.9 percent.

Industry analysts had predicted June auto sales could drop by double-digits to their lowest monthly rate in 16 years.

Dearborn-based Ford blamed the latest sales decline on high gas prices and low consumer confidence, which sent buyers to the sidelines. It reported steep drops in June sales of pickup trucks and sport utility vehicles, including a 41 percent year-over-year decline for the F-Series pickup, a perennial best-seller, and a 52 percent drop for the Ford Explorer SUV.

George Pipas, Ford's top sales analyst, said SUV sales are probably down for good.

"Our view is that gas prices aren't likely to go down, and more importantly, many consumers have moved on," he said. "We believe that the segment has merit for certain consumers but is not likely to rebound at any point."

For the first half of the year, Ford's sales were down 14 percent compared with the year-ago period.

U.S. auto sales had already fallen for seven straight months as of May, the longest period of consecutive monthly drops in eight years, according to the auto information Web site Edmunds.com.

When customers do buy, they're picking smaller cars, crossovers and hybrids.

With gas prices soaring, drivers are looking for more fuel-efficient models. But there aren't many options on the lot, Mason reports.

"Only about 12 percent of all vehicles out there get better than 25 miles per gallon." Lindland said.

Ford said sales of its smallest car, the Ford Focus, rose 28 percent in the first six months of the year, although Focus sales fell in June. Pipas blamed the decline on supply problems and a cut in sales to fleet buyers.

The automaker said last month it plans to increase production of the Focus as well as the Mercury Mariner and Ford Escape small SUVs.

Ford shares sank to a 52-week low of $4.41 early Tuesday but recovered to $4.72, down only 9 cents, in afternoon trading. They have traded as high as $9.64 over the past year.

The market responded well to GM's news. Its shares rose 67 cents, or 5.8 percent, to $12.17 in afternoon trading after briefly falling as low as $10.57 during Monday's session, the lowest level since Sept. 22, 1954, according to the Center for Research in Security Prices at the University of Chicago.

The Associated Press reports unadjusted auto sales figures, calculating the percentage change in the total number of vehicles sold in one month compared with the same month a year earlier. Some automakers report percentages adjusted for sales days. There were 24 sales days last month and 27 in June 2007.

[Gary Kempf]

I am not a fan of Ford, But I would think ol Henry is flipping around in his grave in total disbelief of what is happening to his company.

[moneybags77]

Ford used to pay its workers enough so they could buy their cars, now they outsource and we read stuff like this.

[incog-nito]

I used to own a Ford Taurus. Transmission gave out at 60K miles = $2500 repair bill. Front-end gave out at 90K = $1200. Radiator blew open at 100K = $500.

Good thing those days are long behind me now.

[brianp55]

"The demand for more fuel-efficient vehicles has been a boon to Japanese automakers such as Toyota Motor Corp. and Honda Motor Co., which rely less heavily on trucks and sport utility vehicles than the Detroit Three. "

This says it all. American automakers have ONLY themselves to blame. What are these executives being paid to do at these companies? Quality sucks, styling sucks and they''re building the wrong TYPES of vehicles. How could the decision-making process possibly be any worse within these companies?

[fstop100]

Should we be surprised? At one time GM Ford and Chrysler were the big 3. made some great automobiles too. Then came the bean counters and greedy corporations and gave up quality for money. The big 3 deserve to go under.

[brianp55]

"Should we be surprised? At one time GM Ford and Chrysler were the big 3. made some great automobiles too. Then came the bean counters and greedy corporations and gave up quality for money. The big 3 deserve to go under. "...fstop

I''d say that the UAW shares a great deal of the blame.

[lewiston14]

Well lets see how many more people lose their jobs over this. More people tho tell the collection people to eat rock salt and send india the bill. Banks love to write off billions a month.

[edward1975-2009]

Poor quality and over-pricing of their product has come back to bite Detroit in the butt. And rightly so. Maybe now they will wake up, before there are no U.S. made cars.

[cobraman_pa]

Why should we be surprised that Ford sales are down 28%...they have the worst customer service i have ever experienced in any type of busness. Dealing with their customer service on their web site over two years was horrible. I have a Ford and a Honda. I sent e-mailes to Ford over two years and could never get someone to call me let alone solve the problems with my new Windstar SEL. Honda was great the two times i contacted them. I am 50 years old and the Honda Accord is by far the best car I have ever owned. I will never buy another Ford again.

[Gary Kempf]

brianp55;

I agree, there is more than enough blame to be shared from the top CEO, to the UAW worker getting $28.00 a hr putting plastic clips in for bodyside molding.

[johnpatrick9]

These cars are made by our fellow Americans and for years these corporate dummies have been pumping out cars of lesser and lesser quality and sticking it to their fellow Americans.....the enemy is ourselves, our greed and arrogance and selfishness toward one another. I hat ebuying a foreign car for it is another sign of our decline since the Second World War.....we use to be a "contender."

[shoebox119]

I have absolutely no sympathy for U.S. car makers nor the idiotic consumers who have been buying gas-guzzling pickups and SUV''s for the past 10 years.

They''ve had 35 years since the OPEC crisis of 1973 to get their act together and follow the example of the rest of the industrialized world:

1) Produce much higher fuel efficient vehicles.
2) Produce much smaller vehicles, period.
3) Stop subsidizing new highway construction.
4) Begin planning/building mass transit systems.

You are even having young men and women die overseas to sustain your greedy, lazy lifestyle with your air polluting, gas-guzzling trucks and SUV''s.

How any of you with a conscience sleeps at night is anyone''s guess.

[sociald63]

ford cars are the worst. they should stop the production. go out and buy an audi s6 and a nissan hybrid altima instead :)

[fstop100]

Yes the unions were a part of the problem.
Don;t forget the oil companies bought out all the trolley car lines in the early 1900''s and put them out of business to get people to depend on oil. It is time for payback, their profits should fund mass transportation.

[edgardebbins]

Time is running out but it might still be possible for the Big 3 to stop the suicide. What if in the next few months, they all get focused on building small cars that get at least 40 mpg. Make them simple enough that the middle class can afford to buy them. Then get busy on making an electric car that can be plugged in and charged up like a cell phone. If we had to someday, we could all have solar panels and windmills on our roofs to power up our electric cars.

[bogusbones]

these guys have had thirty years to develop fuel efficient vehicles. instead they shove SUV''s down the consumer''s throats. they will say it is what the consumer wanted. you all knew in detroit that oil prices would eventually go higher but chose to ignore the signals and warnings for years. absolutely stupid marketing and forecasting. if it weren''t for european sales ford would follow the path of american motors. get with the program all of you automakers. you''ve had far too long to adjust and didn''t so higher profits could be made selling larger cars and trucks. short term gain long term loss. blame wall street piggies as well for demanding quarterly profits.

[bobnjersey]

[What are these executives being paid to do at these companies?]
[Posted by brianp55 at 01:55 PM : Jul 01, 2008]

keep the stock price up. really, this is the only focus of nearly every american company ... the customer is really the stockholder ... and they''ll do whatever to make (and keep) ''them'' happy.

i''d guess they aren''t happy today.

[bubbabear200]

Last year I decided to purchase an American Car a 2007 Ford Mustang.
For the last 15 years I purchased Japan products and mostly they were great cars.
Now this Ford Mustang I purchased, The lower plastic grill fell off taking the car home and since it was cracked from hitting the road I took it back to the Ford dealer and they said they were sorry but any part of my mustang which falls off is not covered by any warrenty. Then a few weeks latter the pasenger side outside mirror glass fell off, again Ford would not cover the part even though the Mustang had only 500 miles on it. After a year and fuel pump problems, Fuel control problems, engine pre ping problems, A car that at stop signs that smelled like a sick skunk, Fuel line leaks, rattles all over the car and then a last straw, a power window failed, I traded it in at a loss and purchased another Japan vehicle.

[brianp55]

I suspect that the demands of the UAW had a lot to do with keeping the US automakers focused on building larger vehicles with higher sales margins, even when it was obvious that future profitability lay in smaller cars. Simply stated, the Big Three had to sell vehicles with higher margins to pay the wages and bebefits demanded by the UAW. But, I could be wrong about this.

[seis-6-six]

And meanwhile my murano gets great mileage,

[barbaraf4]

"ford cars are the worst. they should stop the production." Posted by sociald63
~~~~~~~~~
Thus the slogan: Found On Road Dead

[hungry1968]

I had a 2002 F-150 pickup, and I can''t tell you what a horrible disappointment that was as a vehicle.

Computer control problems, faulty rotors (they were warped at 8,000 miles) turned - warped AGAIN at 20,000 miles and COULD NOT be turned again (I had to PAY for replacements), an electrical short caused by a bad ground, and a rattling noise that couldn''t be diagnosed. I traded it in with 32,000 miles on it after 3-1/2 years of a 5 year purchase plan. And the WHOLE time, they REFUSED to honor my extended warranty until I threatened to sue them.

I''ll NEVER buy another Ford again, and continue to look forward to their demise. The day Ford closes it''s doors, will be sweet vindication.

[kennedy7955]

Here is a message for Ford and the other US automakers. It is time you got on the ball and started making electric cars. Plug-ins. Nobody is really making them yet and it is a market that will explode if you will only make them. So what are you going to do? Wait for $30 a barrel oil or start looking to the future?

[faith_in_w]

This is all Clintons fault. If he hadnt made the dollar strong, gas would have been expensive and people wouldnt have bought all those poor milage SUV''s.

[kennedy7955]

Here is a message for Ford and the other US automakers. It is time you got on the ball and started making electric cars. Plug-ins. Nobody is really making them yet and it is a market that will explode if you will only make them. So what are you going to do? Wait for $30 a barrel oil or start looking to the future?

[faith_in_w]

kennedy7955, Chevy Volt comes in 2010.

[faith_in_w]

I love my Checker Aerobus. Its American made and gets great milage.

[bobnjersey]

[I love my Checker Aerobus. Its American made and gets great milage.]
[Posted by faith_in_w at 03:29 PM : Jul 01, 2008]

oh gopsoccermom ... you''re recycling the posts now?

[bobnjersey]

[This is all Clintons fault. If he hadnt made the dollar strong ...]
[Posted by faith_in_w at 03:25 PM : Jul 01, 2008]

it''s ''all'' clinton''s fault ... this goes without saying. he even tainted the intelligence on george and d!ck to make them look bad.

[kennedy7955]

kennedy7955, Chevy Volt comes in 2010. Posted by faith_in_w"

Good info, good post. But you must agree that 2010 is a LITTLE LATE. And only 1 model?

[fiberglass3]

Ford sold its electric vehicle technology back in 2003.

See Below:



Norwegian automaker Think Global said Monday it planned to sell low-priced electric cars to the masses and will introduce its first models in the U.S. by the end of next year.

The battery-powered Think City will be able to travel up to 110 miles on a single charge, with a top speed of about 65 mph, the company said. It will be priced below $25,000.

With most automakers focusing on hybrid technology, only a handful, including Nissan Motor Co. and Mitsubishi Motor Co., have announced plans to produce all-electric cars. Mitsubishi''s MiEV is set to go on sale next year.

Ford Motor Co. was the longtime owner of Think but sold it in 2003. It was purchased by Norweigan investors two years ago, and began selling cars in Norway this year, with sales in Sweden, Denmark and Britain expected this year. The company said its annual production capacity in Europe is 10,000 vehicles.

[whitemale08]

Thanks Ronny for your forsight as President.

I knew that I would enjoy serfdom.

I knew that if I became Republican I would become proud to look away from alternative energy.

I knew that if you lied to me about Weapons of Mass Destruction I would still believe you.

Thanks Ronny for all that you have done in behalf of a gratefull nations...

Thanks...

Your Serf and idol worshiper

[kennedy7955]

"The GM Volt plug-in hybrid was supposed to hit showrooms in 2010 for $30,000. Well, apparently it''s not that easy to redesign wipers, stereos and other electrical accessories so they drain as little juice as possible from the battery. GM has announced that the first generation Volt will be "closer to $35,000". The good news is that the late 2010 deadline hasn''t been officially pushed back, though GM says that if it can''t make it, the car might be delayed until the Spring of 2011."

[kennedy7955]

You would think that GM could make a plug-in on the cheap. The Chevy Volt is too expensive and too fancy. I expect it to bomb.

GM- take your cheapest car, throw some batteries in it, throw an electrical cable in the trunk and sell it for $16,000 This is billion dollar advice.

[ringading3]

When both Ford and Chevy go bankrupt because of hugh debts caused by the UNION THUGS, I say good ridance. When you cave in to the UNION THUGS you get what you deserve! Buy foreign and get a good vehicle.

[venkata4--2008]

A loss. They could have given more contribution to Democratic party in 2004. This prez. & VP had only delivered to Big oil and defense suppliers. Could have given a good thought before contributing to Big oil republican party.

By the way for every dollar increase in gas/aviation jet fuel price requires a 20 billions more for Military fuel cost just an expert estimate.

[whitemale08]

RingADing-

It''s not the Union''s fault.

Union''s always believed that America should earn a decent wage to buy its own products.

Republicans have turned the word ''Protectionism'' into a four letter word.

We have to be protect ourselves from serfdom.

We don''t care about Wall Street.

We only want our pensions to be owned by our same employees not some hedge fund.

Get with the program bro learn to be an American first.

[cbsblogger]

Every American big auto CEO should be fired and replaced with a Japanese version. The Japanese have made the correct decision and established a priority to build quality cars. American workers can build quality cars but they need competent management to make the right management decisions on types of cars and with a committment to quality.

The current bunch of fat cat CEOS have only interests in compensation and perks. They need literally thrown out of the board room and replaced with Japanese that make far less money but understand what customers want.

[cbsblogger]

GM had the EV1 electric cart but their idiot management not only shelved it but destroyed it, likely at the behest of big oil.

See the movie "Who killed the electric car?"

American CEOs made those decisions and it has not only hurt American business but it has hurt America.

http://www.youtube.com/watch?v=N7Mpe7XfODk

[ringading3]

Your Ford and Chevy stock is worthless because the bond holders are the true owners of the companies. When both Ford and Chevy go bankrupt because of hugh debts caused by the UNION THUGS, I say good ridance. When you cave in to the UNION THUGS you get what you deserve! Buy foreign and get a good vehicle.

[lewiston14]

$25000 is still way to much for a tiny electric car

[bobnjersey]

[ When you cave in to the UNION THUGS you get what you deserve! Buy foreign and get a good vehicle.]
[Posted by RingADing3 at 04:23 PM : Jul 01, 2008]

andrew carnegie ... is that you?

[jlagat]

I guess GM shouldn''t have killed off the EV1. Oh well. What goes around, comes around.

[whitemale08]

RingADing-

That''s not true. The bond holders are not the true owners of the company.

The true owners of the companies are those that own the preferred stock.

And who own the preferred stock might you ask?

Those are the banks that make up the Federal Reserve System:

Barclays, Citibank, JP Morgan, Lezres Fehrer, etc.

Just Yahoo every major corporations stock and check for those that own the "preferred stock". It''s allways the same banks. Why?

Because the Federal Reserve System gives them the life to underwrite the IPO or Initial Public Offering.

Those banks turn around and monetize the IPO and leaves everyone else on Wall Street including the bond holders to gamble on how long that company will stay alive before it goes bankrupt.

[seis-6-six]

Its not the Unions fault.
Blame the Upper Management who had no vision for the future.
Blame the Designers for not being passionate about their craft.

[whitemale08]

RingADing-

I know you are sitting there and saying to yourself "Wow he''s right, How does whitemale08 know all of this stuff?"

It''s because I learned that the FEDERAL RESERVE SYSTEM is a con game.

It''s know different then a couple of hustlers on the street that try and play that shell game with you to take your hard earned money.

Study the History of the Federal Reserve System and I gaurantee you will know everything you need to know in this life under this system.

[acolton1]

Wake up Detroit, Ford, GM and Chrysler.

The era of the SUV just ended when gas hit $4 a gallon. Start making 38+mpg cars and americans need to learn to conserve and not Drive Big Big Cars with Big Big Rims.

I have a Honda Fit 5 speed & it get 38mpg and I can drive it to and from work for 2 weeks without putting gas into the tank. It has a 10.8 gallon tank, do the math.

[seis-6-six]

whitemale08,
kind of like the FDA being the biggest drug dealer in the block?

[whitemale08]

RingADing-

You see our Education system is designed to not teach us these things about the Federal Reserve System because then everyone will learn that it''s con.

What we learn in school and in college are skills to help manage that system.

That''s what makes the system so effective is to focus the student on how to be proficient at managing a certain aspect of the system instead of understanding the way the global financial system is designed.

Until we recognize that fact we remain illiterate and in darkness wondering why the effects and consequences of that system are allways so painfull.

[underdogus10]

The future of America looks bleak, the sudden withdrawal of overseas invesment will see their economies go into freefall, their currencies will become worthless, property prices will collapse, businesses will fail...