Chrysler, Ford sales tumble in July
Wed Aug 1, 2007 2:27PM EDT
By Kevin Krolicki
DETROIT (Reuters) - Ford Motor Co and Chrysler Group posted weaker-than-expected U.S. sales for July on Wednesday, underscoring the pressure on auto sales from a weaker housing market and higher gas prices.
Ford sales dropped 19 percent, while Chrysler's were down 8 percent before adjusting for an additional selling day in July last year.
The Ford drop reflected slower showroom traffic and an 18- percent decline in sales for the automaker's market-leading F-Series pickup trucks.
The drop comes less than a week after Ford posted surprisingly strong second-quarter results, while cautioning it would face a tougher second half, especially as a weaker housing market weighs down truck sales.
We know we have a lot of work to do and July is a sobering reminder of the economic and competitive challenges we face, said Mark Fields, Ford's president for the Americas.
Nissan eked out a nearly 2-percent gain on an unadjusted basis on stronger sales of its newer Versa subcompact and Altima sedan. By contrast, Nissan-branded truck sales dropped 10 percent, the automaker said.
Some of the housing issues (and) fluctuating fuel prices are keeping consumers off balance, Nissan Division chief Bill Bosley told Reuters.
Other major automakers were set to announce July sales results later on Wednesday.
Analysts expected July sales to show a year-on-year decline for the industry as a whole, although the Ford and Chrysler results were below expectations.
U.S. auto sales, one of the leading indicators of consumer spending, began slowing in the second-quarter and the knock-on effects of a weakening housing market and relatively high gas prices were widely expected to have capped demand in July.
MORE AGGRESSIVE DISCOUNTING
The signs of weaker sales for the industry in July come despite stepped-up incentive spending.
On a combined basis, the average new car incentive, including cash rebates and concessional financing, cost manufacturers $2,524 in July, up 4 percent from a year earlier, according to industry tracking service Edmunds.com.
The Detroit-based manufacturers led the pack with Chrysler at $4082, followed by GM at $3,130 and Ford at $2,984 on average, Edmunds said.
But in a continuation of a recent trend, major Japanese manufacturers also discounted more aggressively in July.
Toyota increased its incentive spending almost 48 percent year-on-year to $1,492 per vehicle in July, while Honda's spending jumped 28 percent to $1,146, according to Edmunds.
Auto sales incentives are widely tracked by analysts as an indication of the relative profitability of competing automakers and the pressure they face to move inventory.
The market for pickup trucks, which accounts for about 13 percent of overall U.S. auto sales, has become the most fiercely contested segment, as automakers sacrifice margins with expensive sales offers in order to protect share.
In July, GM, Ford, Toyota and Chrysler were all offering interest-free financing and cash rebates to bolster truck sales, which are closely tied to construction spending and housing starts.